The Cocoon blog

Customers sometimes tell us they feel hesitant leaving something as personal and emotional as leave “up to software.” But the reality is that even if you’re paying for a rep-based “white glove” service, that doesn’t mean your employees are getting the attention and service you might think. Even if they are, it’s undeniable that software can automate compliance monitoring, reconcile eligibility requirements, and tackle payroll calculations and do so quickly with less room for error.

Here’s a side by side comparison of what to expect with Cocoon’s leave management software versus the traditional leave provider experience. 

For employees taking leave:

Planning and announcing your leave

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Talking to your HR team to request your leave is nerve-wracking enough, especially if you don’t understand the company policies, state laws, and general options for your leave. From there, dialing up a stranger who will become your new leave of absence manager on a 1-800 line, to begin to piece together your leave sounds unthinkable. Pre-planning in Cocoon means you can start seeing timelines and options before you tell anyone and go into that conversation with confidence.

“Employees love that there’s automation and interactive forms in the app so they can just plug stuff in and start planning. But they also feel that Cocoon gives the right amount of hand-holding when you need it.” — Melanie Wagner, Senior Manager of People Operations at Hatch

Determining your eligibility 

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When it comes to leave compliance, you don’t want to be at the mercy of how knowledgeable a rep happens to be about federal and state leave laws, and then hope that they can reconcile them with your company’s policies perfectly on schedule. This can lead to noncompliance or miscommunications — both with serious potential legal and/or economic impacts. Knowing they’re baked in with Cocoon helps you start off compliant and stay there — and if anything falls out of place, you’ll get notified immediately.

“It's just not feasible to have a person on site to manage the number of leaves, then beyond that, someone who understands every state's differing compliance regulations. We’re grateful for partners like Cocoon thinking about the employee experience whether it’s their first or second time." — Payroll Team Lead, Cocoon customer

Filing state and disability claims

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Without Cocoon, filing claims either means passing power of attorney and intimate details to your leave rep or simply going it alone. Either way, nobody takes you through the process in real time nor shows you what’s next. Cocoon lights your path, walking you through the claim filing process with education and automation to save time and reduce the risk of errors causing endless follow-ups, while keeping you in the know about what’s due, when, and how to submit it.

"Cocoon puts a leave taker in the driver's seat — making a process that can often feel ambiguous and tedious more streamlined and simplistic!" — People Team Lead, Cocoon customer

Understanding leave pay

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Knowing when, how much, and from where you’re getting paid is often one of the most stressful parts of leave — not only because you might not know how you’re going to pay bills, but also because you’re likely wrapped up in whatever prompted the leave in the first place. Being in the hospital or at home with a new baby is not the appropriate time to call someone wondering where your latest paycheck is. Cocoon wants you to know before, during, and after you get paid so you can plan accordingly.

“While I was on leave with a new baby the joke was, “Choose two: eat, sleep, or shower,” and I was instead building spreadsheets to show what I was owed.” ‍— New parent before using Cocoon

Getting support along the way

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The “one-on-one” experience you think you’re getting with a service rep isn’t for emotional support, it’s likely about logistics that would be automated for you already in Cocoon. We see that software taking care of the logistically sticky parts of leave management tends to resolve a lot of the issues that prompt you to need additional support in the first place. If not, we’re still only an email or phone call away with a team of specialized experts. The experiences of our Support team go on to constantly improve our product and education — something that doesn’t get codified at a rep-based company.

“I just wanted to take a minute to say how thrilled I’ve been with Cocoon. I’ve talked to so many other parents navigating the parental leave process right now and they’ve all had such a difficult time, but you’ve made it absolutely seamless." — Customer feedback survey response

For employers and People teams:

Reporting capabilities

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Information that gets cobbled together manually and relies on you requesting it is prone to inaccuracies and delays. With Cocoon’s Admin Dashboard data at hand, you can actually measure the ROI not just of Cocoon software, but of your leave program in general:  how many benefits were recovered, policy utilization metrics, average leave length, etc. — ultimately giving you an advantage in strategic planning, measuring company savings, and demonstrating the efficacy of your leave program.

“It was really helpful when we went through renewal to make the case for finance… to [say] ‘we’ve actually saved this much money that we would have had to pay in salary.’” — HR Admin at a 2,000-person software company.

Calculating payments for questions and compliance

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Leave-takers rightfully get quite stressed and confused about their pay situation while on leave — with lots of questions that People teams need to be able to answer quickly and correctly. You also need to understand how your policy overlaps with other legal obligations and statutory benefits to ensure compliance and for proper accounting of them. If you’re operating in multiple states, this only gets more complicated and crucial. With Pay Insights, you get a breakdown of all payments made or to be made to anyone on leave across several categories so you can answer questions, stay compliant, and forecast future leaves, without having to calculate it yourself.

Each year, 20 million Americans file for leave with the Family Medical Leave Act (FMLA), and on any given week, 5% of the workforce is taking a leave of absence. With more than 100 leave laws in the U.S., even if you master your employee leave laws in California, you’ll find that adding New York’s means starting from scratch. These intricacies become a drain on your time and open you and your company up to unnecessary risk — which is why we created this guide, and why Cocoon takes on the task of sending eligibility and designation notices.

Read on for the basics of managing compliant leaves in every state and download our FMLA leave compliance notice checklist for notices you’re required to send employees when they request leave.

Checklist: FMLA leave compliance notices

Use this checklist to keep track of notices you're required to send employees when they request leave.

The three layers of FMLA and leave compliance

To break down the complexity of leave compliance, we find it helpful to discuss in terms of the “three layers”: entitlements, commitments, and accommodations. Which are then followed by required compliance communications.

1. Leave entitlements

A leave entitlement is a law that provides job protection for a leave of absence. Job protection is a benefit where the employee has a right to keep their job if they miss work for a qualifying reason (like bonding with a child) specified under the law. 

There are leave entitlements at the federal, state, and local levels. These laws are typically clear-cut, black-and-white, and include certain employer and employee obligations. For instance, Family and Medical Leave Act (FMLA) covered employers are required to send their employees compliance notices at different points throughout their leave. 

Note that leave entitlements are different from statutory pay entitlements. A leave entitlement protects your job, while statutory pay provides partial to full salary replacement while on leave. Examples of state or local pay entitlements are the San Francisco Paid Parental Leave Ordinance (SF PPLO), California Paid Family Leave (CA PFL), and California State Disability Insurance (CA SDI). There are some laws that provide both job protection and pay like Washington’s Paid Family and Medical Leave. 

The graphic below illustrates many, but not all, of the state leave and pay entitlements that employers operating in multiple states might need to consider.

There are typically four main components to laws that fall under the umbrella of leave entitlements: 

1. employer coverage requirements
2. employee eligibility requirements
3. qualifying leave reasons
4. benefit-related details. 

Here’s what it looks like for FMLA, as an example:

Employer coverage requirements

FMLA covers your company if one of the following applies:

• Your company has employed 50 or more employees for at least 20 workweeks in the current or previous calendar year – including employees who your company jointly employs as a “joint employer”
• Your company is a successor in interest to a covered employer (described in Section 825.107 of the FMLA regulations)

Employee eligibility requirements

Employees of covered employers are eligible to take leave under FMLA if they:

• Have worked for your company for at least 12 months. The 12 months of employment are not required to be consecutive and the look-back period is generally 7 years from the date an employee seeks leave (or longer if breaks in service were due to active military service);
• Have worked at least 1,250 hours during the 12 months leading up to the start of leave; (special hours of service rules apply to airline flight crew members); and
• Are employed at a location where your company employs 50 or more employees within 75 miles of the employee’s worksite

Qualifying leave reasons

Covered employers must grant eligible employees up to 12 workweeks of unpaid, job-protected leave in a 12-month period for one or more of the following reasons:

• The birth of a child, and to bond with the newborn child;
• The placement of a child for adoption or foster care, and to bond with that child;
• To care for an immediate family member (spouse, child, or parent – but not a parent “in-law”) with a serious health condition;
• To take medical leave when the employee is unable to work because of a serious health condition; or
• For qualifying reasons due to the employee’s spouse, child, or parent being on covered active duty or call to covered active duty status as a member of the National Guard, Reserves, or Regular Armed Forces.

The benefit and related details

• The Family and Medical Leave Act (FMLA) provides eligible employees up to 12 workweeks of unpaid leave a year, and requires group health benefits to be maintained during the leave as if employees continued to work instead of taking leave. Employees are also entitled to return to their same or an equivalent job at the end of their FMLA leave.
• The FMLA also provides certain military family leave entitlements. Eligible employees may take FMLA leave for specified reasons related to certain military deployments of their family members. Additionally, they may take up to 26 weeks of FMLA leave in a single 12-month period to care for a covered servicemember with a serious injury or illness.

While it’s clear from the above that FMLA includes a lot of specific details for employers to keep top of mind, the same is true for all state and local laws governing employee leave that overlap, add on to each other, and occasionally conflict.

2. Leave commitments

Leave commitments are voluntary leave policies and benefits, like an employer’s parental or medical leave policy and disability insurance. 

Like leave entitlements, employers generally impose employee eligibility criteria for leave commitments, and offer a certain amount of time and pay for a leave through their policy. Some components of a typical leave policy are:

• Qualifying reasons
• Leave time & pay
• Tenure requirements
• Covered employee types
• Permitted leave increments
• Coordination with other benefits

Keep in mind that employees covered under entitlements like FMLA or the California Family Rights Act (CFRA) can legally take leave whether or not you have a policy in place, and regardless of how much time you offer.

3. Leave accommodations

Finally, leave accommodations typically come into play when employees seek to take medical leave but are not eligible and/or have exhausted any leave entitlements or commitments. This happens because employers may be legally obligated under the Americans with Disabilities Act (ADA) to provide job-protected leave as a reasonable accommodation to employees with qualifying disabilities. 

4. Compliance notices

When an employee requests leave, there are several notices employers covered by FMLA must send to employees. These include: 

• Notices telling employees whether they are eligible under FMLA
• Their rights and responsibilities if they are eligible employees
• A designation notice telling employees whether their request for FMLA leave has been approved or denied 

Notice of Eligibility example

This notice must tell an employee whether they are an eligible employee under FMLA. As a reminder, an employee of a covered employer is eligible to take leave under FMLA if they meet all three of the criteria in the “employee eligibility requirements” list in section one above.

The notice must be executed carefully and fulfill the following:

• You must notify employees of eligibility within 5 business days either orally or in writing of the initial leave request or when you discover an employee may need leave for an FMLA-qualifying reason.
• If an employee is not an eligible employee, you must state at least one reason why they fail to meet the FMLA’s eligibility criteria. If the reason for ineligibility is the employee’s failure to satisfy FMLA’s length of service or hours of service requirements, you must also tell the employee, as applicable, the number of months the employee has been employed by the employer and/or the hours of service with the employer during the 12-month period.

Other notices required include a Notice of Rights and Responsibilities, a Designation Notice, and much more. To see all notices, download our full FMLA leave compliance notice checklist.

Don’t compromise on compliance: Cocoon’s technology codifies ever-changing federal, state, and local leave laws and automatically sends required compliance notices, eliminating human error and legal risk across geographies. 

Key takeaways

With ever-changing leave laws and variances across state lines, it can be time-intensive to ensure your organization is always compliant. 

• Leave entitlements are clearly defined laws that provide job protection for a leave of absence. 
• Leave entitlements are different from statutory pay entitlements.
• Leave commitments are voluntary; they are the time off and pay you (as the employer) commit to your employees when it comes to leave. 
• Leave accommodations are made when an employee requests a leave of absence but is not eligible and/or has exhausted any leave entitlements or commitments.
• If you are covered by FMLA or other state laws, there are certain things you are obligated to tell employees and notices you are required to send. 
• Download our compliance notice checklist to make sure your People team knows what these are—and become a Cocoon customer so we can help you.

The turmoil of the pandemic and the “Great Resignation” have taught us many things (maybe too many things…!) with one clear takeaway for People teams being that simply having “the right list of perks” isn’t enough. Employees need to know that their company has their back in good and bad times. That’s why more and more companies aren’t just offering competitive leave programs, but taking a more structured approach to leave management. In order to do that, however, People teams need to find scalable solutions for today and the future. That’s why we talked to Sterling Kahn to understand the current landscape, where Cocoon is taking it, and why.

Meet Sterling Kahn

Sterling Kahn helped found Business Operations at Cocoon over two years ago. Previously, he worked with some of the largest and fastest growing businesses in tech, like Stripe, helping to develop their global support and education programs. As the founding member of the Cocoon support team, Sterling is a Certified Leave Management Specialist. He’s guided thousands of humans—and the people who love them—through their leaves, making him uniquely positioned to see the internal process at Cocoon and the external impact it has for customers. We sat down with Sterling to learn more about Cocoon’s support model, how it came to be, and why it’s the future of leave management.

How have leaves traditionally been managed?

“Many companies who look externally to manage their leaves have traditionally chosen to work with firms that use a ‘rep-based’ model. That means, as the leave taker comes forward, the leave-taker gets introduced to a third-party representative who’s then responsible for helping the employee manage all aspects of their leave. Given their nature to care deeply, People teams want to be more hands-on with leave, but simply don’t have the time, knowledge, or resources to do so—so they leave employees in the hands of someone who, in theory, does.”

Why do you say “in theory”?

“In theory, a third-party rep is great at what they do, has experience and accurate information, is quick to respond, and makes leave-takers feel seen and heard. But the reality is that the vast majority are overworked, and have too many accounts to give each person a personalized touch. Combined with high turnover, this can lead to inconsistent and unreliable care when your people need it most.” 

“It’s unrealistic to think that one person is going to be able to take care of every single thing for you during your leave. For one, they have to be an expert in federal, state, local, and your employer’s policies, insurance forms and filling them out, payroll… and constantly be communicating clearly about how to tackle all the work behind the leave, and helping you hit your deadlines. In the end, there’s just too much room for error and miscommunication, which is why the founders of Cocoon wanted to offer a totally different approach.

What makes Cocoon’s approach to leave support different?

“So many factors! (laughs) But for one, Cocoon doesn’t have a ‘monolithic leave expert.’ Instead, we offer a team of empathetic, specialized experts across topics like leave, claims, or pay. We ensure that leave-takers are supported when they need it by someone who knows what they’re talking about, and that this specific thing goes well for you.”

“More broadly, we really see the Cocoon product offering itself as something strong enough to take the place of a leave rep. In an ideal world, we’re building a product so great, you won’t even need to interact with our support team; but when you have specific questions, we’re right there.”

How does the Cocoon product replace a leave support rep?

“For some People teams, having software as ‘the front line’ may sound impersonal, but Cocoon isn’t just a help-doc knowledge base or a support chatbot. It’s a constantly evolving and complex software tackling anything from supporting and educating People teams, managers and leave-takers; to using algorithms and automation to improve error-prone pieces of the puzzle like payroll calculations.”

“Cocoon does all of this with an interface and experience that takes into account the different needs, experiences, and emotions of the people using it."

"We want to harness the power of human-to-human moments of deep empathy to inform our empathetic software solution."
_{- Sterling Kahn, Head of Support Operations at Cocoon}

“We take in feedback to constantly improve our product, product experience, and the education our product provides. All in all, that means we can leverage technology for what it’s best at while retaining the best of what makes human interactions important and special.”

What benefits do HR teams and leave takers get by doing it this way? 

“Lots! But focusing on the top three, People teams will first see that this strategy is scalable—the knowledge doesn’t just live in one support rep’s head. So if someone is out of office or they leave the company, your leave program isn’t suddenly on hold or left to a newbie. Cocoon can grow with your company in ways that one person cannot.”

“Secondly, it puts the power and privacy back in leave-takers’ hands. By being a dynamic tool that lets you project different scenarios (before you even need to tell anyone you’re taking a leave!) we help leave-takers make the best decisions for their own life, with the modularity to make it work for anyone.”

“Lastly, Cocoon and its platform also serve as the education center for leave-takers, People teams, and managers. We need to teach employees and employers how leave works, not just toss over a bunch of insurance claim paperwork and hope it works out, or say “trust us” and not explain anything we’re doing. This lack of understanding and education is fundamentally why leave is in such a dire state across the industry.”

Any final words of wisdom for People teams looking to improve their leave management support this year?

“Whether this topic interests you from the standpoint of company culture or simply staying compliant, continuing to not take action or consider better alternatives can be costly. Taking a leave is often one of the biggest inflection points in a person’s career. If you mishandle the process, your employee might choose to leave, costing you 1.5-2x their salary and the time to replace them; or you could get sued and face FMLA damages to cover lost pay, etc.”

“The topic of leave is ever more important not just because it’s a “feel good idea”... it’s just better for everybody. Without better leave management support, leave can be one of the most treacherous parts of someone’s career in a moment where they’re already going through a lot. So don’t just offer “competitive leave”—get a solution that ensures you’re compliant and takes really good care of people.”

For most People teams, the job of managing employee leave extends far beyond helping individual employees navigate the process. Employers have to juggle countless tasks at the organizational level: determining the best policies, ensuring equity across employee types and geographies, making sure they’re not leaving money on the table, and more.

Cocoon’s new Insights feature surfaces key data to empower you to make informed decisions about your company’s leave program, demonstrate its ROI, and understand costs and utilization. With Insights, instead of pulling data into spreadsheets and wading through manual calculations, our platform does the work for you (one of the many benefits of having leave management software). Get the data you need with a few clicks so you can spend more time creating the strategies that best support your employees.

What does the Insights feature track?

First and foremost, the Insights feature tracks key trends across different employee leave types and time frames. Insights are now the first thing employer Admins see when they log into their Cocoon dashboard. The section includes four key data points that Cocoon Admins can filter by time frame (see all time, the last year, the last quarter, the last month) and by leave type (parental, medical, or caregiver):

Total benefits recovered

When employees don’t file for all the benefits they’re owed from the state and/or private insurance, employers that offer a fully paid policy end up paying more to keep their salary at 100%. Cocoon automatically calculates how much you save when employees can easily file claims and recoup the benefits they’re due.‍

Cocoon helps employers save an average of $12,515 per leave

Average leave length

Cocoon automatically calculates the average number of working days that employees take during leave. You can also use our benchmarking data to see how you compare to companies like yours.

‍Eligible for state benefits

This number tells you the percentage of leaves taken at your company where state pay benefits are available.

66% of all leaves taken in Cocoon are eligible for state benefits, a number that is steadily increasing as more states roll out paid family leave laws. For distributed companies in particular, this indicates the growing importance of investing in solutions to help employees file for benefits.

Policy utilization

See the average percentage of available leave time used by your employees.

How People teams are using the data

1. To make the case for leave management software 

Measuring total benefits recovered helps People teams demonstrate a concrete return on their investment in leave management software and savings recouped in general. This is particularly helpful data for carving out budget or “selling internally.”

“It was really helpful when we went through renewal to make the case for finance… to [say] ‘we’ve actually saved this much money that we would have had to pay in salary.’” - HR Admin at a 2,000-person software company

2. To understand the efficacy of their leave policies 

Tracking policy utilization across leave types can give you a valuable signal into how well those policies are meeting your employees’ needs. Low utilization rates of parental leave policies, for instance, might lead you to explore potential barriers or cultural norms stopping employees from the full time they’re due.

3. For strategic planning

People teams are often tasked with projecting their annual or quarterly talent costs. Average leave length and the percentage of employees eligible for state benefits are key inputs for these projections. They help you estimate the amount you will spend on employee leave, taking into account potential benefits recouped from state programs.

Cocoon is committed to building intuitive software tools that empower People teams with the information they need to show up for their teams when it matters most. To learn more about how we’re using technology to transform leave, subscribe to our updates below.

Organizations today need to offer competitive leave programs if they want to attract and retain the best employees. Since 2021, there’s been a 13% increase in the number of companies taking a more structured approach to leave management. If you’re one of those companies, it’s critical to do your due diligence before deciding how to manage employee leave—whether it’s with leave management software, a rep-based solution, or even hiring an in-house expert. If you do decide to outsource your leave management, here are some important factors and questions to consider to make sure you find the provider that works best for your company and employee needs.

1. Compliance

Compliance is usually the top concern, as it’s the most complex piece of the puzzle and getting it wrong can be costly for companies and employees. Here’s what to ask a potential provider to make sure you stay on top of compliance no matter where you and your employees are:

1. How do you take federal, state, and local laws into account? 
2. Can you handle compliance across all 50 states?
3. How do you determine our employees’ eligibility and ensure accuracy?
4. Do you send required FMLA and other compliance notices to employees? If so, how are they managed?

Most providers update changes to federal or state regulations around leave automatically in their systems....The top vendors will keep you updated and push out any changes to those regulations automatically." _{Rich Fuerstenberg, Senior Partner at Mercer}

2. Claims submission and tracking

Even if you’re compliant, making sure different stakeholders—from insurance providers to employees—are keeping track of claims and ensuring they’re submitted on time is another key piece of the puzzle. When claims are filed late or incorrectly, employees might be denied the benefits they need to afford to take their leave. That’s why it's crucial to understand how your provider will address the following:

1. Are employees provided tools or assistance to submit claims to both private disability insurance providers as well as state programs?
2. How do you handle getting medical certifications from providers, especially in cases where they will only communicate with patients themselves?
3. Are you insurance carrier agnostic?
4. How will employees know what claims they need to submit, when, and how?
5. Will employees and/or Admins have visibility into each claim’s status throughout the submission process?
6. How do you handle claims submissions for states like New York and California that typically require direct correspondence with the claimants themselves?

💡 See exactly how claims submissions and tracking works in Cocoon with our interactive demo

It’s such a critical time when someone goes out on leave. If paperwork is delayed, it means their dollars are delayed, and that’s awful. When I’d just had a baby, I was exhausted and here I was getting all these bills and suddenly my pay was reduced to 60%. I want this to just be smooth for employees.”
_{HR professional}

3. Employee experience and communication

Your leave management process is something employees interact with in some of the most important moments of their lives that can be chaotic, stressful, and emotional. Make sure your provider aligns with your culture, strategy, and employee needs by asking them:

1. How does your leave experience align with our company culture?
2. How will employees access information and get questions answered before, during, and after a leave? (e.g., via call centers, online resources, interactive software, email)
3. How do you manage employee privacy through the leave planning and claims submission processes?
4. Is the solution and process intuitive enough for employees to understand their leave benefits, timeline, and pay?
5. Will admins have visibility into each employee’s leave and pay details to help troubleshoot if questions arise? 
6. How are employees supported through the transition away from and back to work?
7. What support is available for managers who have team members taking leave?

Leave is a huge topic of discussion. It affects the culture of a company and the resource capacity that you have as well. I know there are some companies that outsource the leave management process because it can be such a burden.”
_{HR professional}

4. Implementation and partnership

Whether your leave management solution is software or service-based, you want to make sure you understand how it will fit in with your team’s workflow and standards. Ensure you can hit the ground running and keep up that momentum by asking:

1. What is the typical implementation timeline?
2. Do you help employers craft competitive, equitable leave policies?
3. What different types of leave can you handle?
4. Will you help us calculate payroll? If so, who handles those calculations?
5. How will you help us track key leave trends at our company over time?
6. What kind of support will Admins receive?
7. Will you help employees access our company’s other benefits during leave?

The best [solutions] allow HR to track all employees who are on leave in detail and report back easily to managers. You no longer have to use ad hoc reporting methods or spreadsheets for that purpose."
_{Rich Fuerstenberg, Senior Partner at Mercer}

5. Price and ROI

Calculating the up front cost is always top of mind, but it’s important to understand not just how much money is being saved or spent but also how much time and burdens the solution saves you:

1. What are your prices and how is pricing established? (PEPM, per-leave fees, implementation fees, renewal structure)
2. By choosing you as our provider, what burdens can you help us take off our plate?
3. Will you help us calculate ROI on an ongoing basis?
   

Start your search for a leave management provider

Though this list of questions is extensive, the number of critical questions employees ask during leave planning can be even more exhaustive—that’s why it’s important to get clear answers before you embark with any leave management provider. Employees take leaves to handle some of the most defining moments of their lives. Giving them a well-planned, seamless leave experience, then, can also be life-changing.

For more helpful guidance on evaluating HR tech solutions across several categories, we recommend looking at SelectSoftware Reviews. They offer dozens of resources on topics like how to think about HR Tech ROI, how to buy HR Tech, negotiation tactics, and more.

You already know that creating a parental leave policy isn’t easy (that’s why you’re here). Regardless of company stage or size, if it’s your first policy or an update, it’s important to have something solid in place, as it communicates your company values and culture to current employees and prospects. When the need finally arises, it gives employees and People teams peace of mind by spelling out who’s responsible for what and offering clarity about their rights and benefits.

That’s why we created our parental leave policy template generator. We built it with guidance from our founding legal counsel, Frank Alvarez, who brings 30+ years of employment law experience. Start by filling in the details, and based on your inputs, the generator will give you a first draft of policy language that you can continue to finalize. You can use this blog side by side with our generator and benchmark survey data to better understand the components and considerations that go into a parental leave policy.

What to consider before launching your parental leave policy

1. Know your “why”

Like most endeavors, it helps to know why you’re doing something before you jump in. Get grounded in why this policy is important to your company and its employees, and why now is the time to enact it. Tapping into your company values and culture. and how you communicate them, helps you get a feel for how you can frame your policy statement. The policy statement is your company’s time to shine, highlighting its unique culture and generosity. 

2. Define employee eligibility

After setting the tone, you’ll need to determine who is eligible, as parental leave covers a lot of different circumstances, like adoption, foster care, or surrogacy. If you haven’t thought through these different scenarios, you might be unintentionally excluding certain families and setting yourself up for miscommunications, lost pay, or legal problems. Below we list some common examples of internal eligibility parameters, what groups parents might fall into, and what benefits they could access (you’ll see them in the policy generator, too).

Some common eligibility parameters

• Employee tenure/hours of service
• Full-time vs. part-time vs. short-term
• Exempt vs. non-exempt
• Geographic considerations (including worksite size)

Cocoon benchmark: 43% of Cocoon customers have a tenure requirement, and of those that do, the median is 6 months (compared to FMLA’s 12 months)

Pro tip: Don’t forget edge cases! For example, would your policy apply to newly hired employees who received children into their families within six months of their start date? The shorter the tenure requirements in your policy, the more likely this question is to come up.

Eligibility groups/scenarios

• Birthing and non-birthing parents — including both emphasizes the unique leave needs of each group (i.e., pregnancy-related and childbirth disability are unique to birthing parents) 
• Surrogacy
• Adoption
• Foster care

Pro tip: New parents via adoption and foster care aren’t limited to newborns and infants, so make sure your language reflects that. 

Benefit offerings

• Time — how long is their leave? Do they have rights to intermittent leave/reduced leave schedules?
• Pay & source — how much will they get paid while on leave? Where does this money come from (e.g., state, insurer, employer)? What happens to commissions and stock option vesting?
• Access to health/non-health benefits (e.g., continued vesting schedule and receiving health insurance)
• Protected time off — will you commit to restoring their same job, an equivalent position, or something else at the end of leave?

Cocoon benchmark: 98% of Cocoon customers offer birthing and non-birthing parents 100% paid leave. Many employers don’t pay everything out of pocket, recouping benefits from private disability and state programs.

3. Align your policy with legal requirements and related company policies and benefits 

Now that you’ve mapped out who’s eligible for what, you need to reconcile that with federal and state laws and your company’s benefits and policies. This is where things can get a little tricky, as things can vary by location—especially if your company operates in many states—and you might not be able to identify all applicable statutory leaves and benefits. However, your policy should recognize that overlapping legal obligations may exist and commit to interpreting and aligning the policy consistent with those laws and related company policies (e.g., PTO policies). 

Common statutory benefits and company policies to consider

• Federal FMLA
• State unpaid leave
• State disability benefits
• State paid family leave benefits
• Private insurance benefits
• Voluntary additional employer pay (e.g., top-up pay)
• Health insurance
• Other non-health insurance benefits (e.g., accrual of PTO, continuation of pension, access to childcare or educational assistance benefits, etc.)

Questions to ask

• Do you match or exceed these benefits and in which cases?
• Will you provide the same or more than what you are obligated by law?
• Will you provide a basic level regardless of employee location?
• Will your policy run concurrently with overlapping statutory benefits or be “stacked” on top of them?

Pro tip: Our interactive state leave laws map and FMLA checklist explain more about companies’ legal obligations for a deeper dive. 

4. Map out responsibilities for important stakeholders

Finally, clarify who’s responsible for what in order for an employee to access these benefits, and document these responsibilities in a place that’s easy to find and always up to date. Failure to do so may mean missing crucial paperwork deadlines that delay pay or make it hard for a leave-taker to understand where they are in the process.

Who are your stakeholders?

• Internal: People/HR, Benefits, Legal, senior leadership, person taking leave, leave taker’s manager and team
• External: Leave administrators, state benefit agencies, disability insurers, medical providers

What are leave-takers’ responsibilities? 

These are just a few examples of responsibilities. You also need to be extremely clear about where these things can be accessed and/or submitted.

• Completing forms — most parental leaves will require employees to file claims with their state, a private disability provider, or both
• Providing information and documentation — what information is needed and in what format? (e.g., a medical certification or doctors' note)
• Understanding consequences —what are key deadlines? What happens if an employee doesn’t comply? (typically delayed or unreceived pay)

What are others’ responsibilities?

‘Others’ here might refer to your People/HR team, or perhaps the external vendors on their behalf, or even an employee’s medical provider. Make sure you know who’s responsible for what and what your leave management partner actually covers.

• Approving or denying leave
• Documenting dates employees provide notice of the need for leave
• Evaluating employee eligibility and calculating leave availability
• Providing employees forms and required legal notices
• Completing required medical certifications
• Reviewing submitted documents
• Ensuring employees understand their rights and obligations, including time deadlines
• Reviewing fitness to return to work and crafting a return to work plan

5. Get a legal review

We just walked through a lot of information (and unlike Frank, you probably don’t have decades of experience in the nuances of employment law.) That’s why after using our parental leave policy generator, and working through the preceding list, you’ll still need legal advice and reviews with an expert who can marry the specifics of your particular organization’s policies with state and federal guidelines, in language that holds up to the law. 

So, while it’s impossible to give each unique organization a copy and paste template for their exact policy, we can help you do some of the heavy lifting to get started—ultimately helping you bring your policy to life faster for employees and their families who need it.

Compared to the world of scarce PTO tracked down to the quarter-hour, flexible PTO is a dream for employees to request time off when they need it, for any reason. For many, it’s a catch-all progressive benefit that covers vacations, sick days, self-care days, or whatever else comes up. Pairing flexible PTO with competitive employee leave policies makes some People teams question whether they really need a compassionate leave policy or not, if they’ve considered one at all.

Cocoon customer, Superhuman, was in the same boat, until they realized that the pandemic and politics of the past few years had left employees and the People Ops team in need of more guidance and specificity to feel supported and prepared. After seeing other companies launch compassionate leave policies, this prompted Superhuman's People team to not only revamp their existing policies, but also implement a new compassionate leave policy. We chatted with Superhuman's People Operations Specialist, Amanda Samuel, to find out exactly why and how her team did it, and what guidance they have for teams hoping to do the same.

Meet Amanda at Superhuman

In a nutshell, Superhuman is email software reimagined—designed to be fast, delightful, and stress-free—saving customers hours on email every single week, to deliver on productivity and peace of mind. One of Superhuman’s most super humans is Amanda Samuel, a People Ops specialist who’s motivated by helping her colleagues do their best work in a diverse and inclusive environment. “I might not be the engineer building the software,” Amanda says, “but I can build the culture.” And it’s exactly this attitude that made her the perfect fit to lead the charge on changing Superhuman’s leave policies.

What inspired Superhuman to implement a compassionate leave policy? 

“We already had a flexible time off policy, but increasingly realized flexible PTO can be too vague for today’s world,” Amanda explains. This vagueness can contribute to flexible PTO being underutilized by employees, with some feeling concerned about the perception of how much time they take and why. “Flexible PTO is great for things that don’t require much explanation. But when something more is going on, you need policies that offer more guidance, specificity, and confidentiality. That way, employees know what’s supported and managers are prepared to give that support.” 

This also prompted Superhuman to see leave as a diversity and inclusion lever to fit a wide array of people and circumstances. “Simply having a diverse group of people isn’t enough—you need to ensure that they have what they need to do their best work and feel supported.” Using this equitable lens, Superhuman saw that they needed to refresh their PTO and leave policies.

What changes did you make to the leave and PTO policies? 

“We updated everything! We added three different types of leave: compassionate leave, caregiver leave, and healthcare leave, adding lots of examples of when they might come into play so people know what they’re for and to ensure that People Ops has thought the scenarios through.” 

“In general, we updated the language to be more inclusive. For example, our bereavement leave covers the loss of any loved one, whether friends or family, recognizing that many folks have chosen family and other structures. Our parental leave policy has always covered birthing and non-birthing parents, but we added a caregiver leave to cover responsibilities folks might have to take care of their loved ones beyond parenthood. We implemented a healthcare leave that focuses on long-term care and recovery for situations like accessing reproductive or gender-affirming care, or chronic illness treatments.”

“We also added a flexible holiday policy to differentiate it from PTO. We didn’t want people to miss out on important or culturally relevant holidays that might not be federally recognized and have their teams chug along without them like other PTO days.”

What was the process to implement these policies?

“The impetus to make these changes came from our People leaders and the leadership team itself, so that was helpful. I also had a lot of guidance and patience from our Director of People Operations, Zoë, which gave me the space and support to think everything through and be deliberate about every word.”

Amanda also did tons of research to see what types of leave were out there, real policy texts that companies were using, along with examples of how they could be used. She drew heavily on Cocoon’s compassionate leave policy text, which also inspired her to want to share Superhuman’s policy.

After several rounds of revisions, feedback, sustainability checks, and legal reviews, Superhuman was able to launch their new policies in December of 2022.

How have employees responded to the new policy?

Though it’s only been live for a few months, Amanda says they’ve already had a few employees take compassionate leave and have gotten positive feedback in general. Employees can feel safe knowing that no matter what might be happening outside work, they have rights and protections at work. “Getting paid is one thing, but knowing you have a safety net is another,” Amanda says.

“The People Ops team also feels more prepared for the unexpected, because we have policies and training to support these situations in a way that’s sustainable and leadership-approved. The policy also helps Superhuman as a company normalize difficult or taboo topics, because on any given day, they could affect anyone.”

What advice would you give to organizations considering a compassionate leave policy and why is now the time?

“In general, life is always happening to your employees, so you can either implement these things proactively or reactively,” Amanda cautions wisely. “You don’t want to fail in the worst possible moment. Given the current moment we’re in—from hybrid work to the pandemic—we knew we had to take action. We didn’t want to wait for yet another crisis or drastic change.”

Additionally, it requires a lot of trust. “You need to trust and believe that employees want to do their best work every day, but sometimes, unforeseen circumstances or life changes might impede them from doing it, and that’s why these policies are in place. If the fear of employees abusing the policy is stopping you, then you need to dig into why that is,” Amanda says.

“Finally, I think taking it slow is important so you can really do your research, look up policies to emulate, and talk to others who have implemented them. That’s why I was excited to share Superhuman’s story—to inspire other companies and give them a starting point.” We couldn’t agree more, Amanda!

Superhuman's compassionate leave policy text

Download Superhuman's policy text to help inform your internal leave policy.

Progressive People leaders come to Cocoon for an automated, technology-driven leave solution so they can showcase their commitment to caring for their employees. Simplifying the process is only one piece of a much larger puzzle – companies need to start with a competitive policy. In the United States employees are not even guaranteed a single day of paid leave under federal law, leaving any wage replacement up to companies and the state. 

Companies have an opportunity to create a more equitable workplace with paid leave policies, especially those with highly distributed workforces. Rather than being at the mercy of whether or not the employee’s state offers a paid leave program, fully paid company policies allow employees across locations to take the time they need, when they need it.

To better understand just what these policies look like, we dove into the data of 224 venture-backed tech companies’ parental, medical, and caregiver leave policies in 2023. Read on for the highlights, or download the full dataset below.

Download the full dataset

See the anonymous policy data of 200+ employers.

Parental leave benchmarks

Paid parental leave is table stakes for employees working in tech. The overwhelming majority of companies in our analysis offer 100% pay for the full duration of their parental leave policies. Supplementing the benefits an employee may receive from state and private disability insurance is one of the best ways People leaders can make sure employees feel supported during their leave journey.

Across companies of all sizes in our data set, the average leave policy for birthing parents is 16 weeks and 12 weeks for non-birthing parents. Here’s a look into how that breaks down as companies grow:

Early stage (5-200 employees)

• Birthing parent policies range from 6 to 26 weeks with a median of 16 weeks of fully paid parental leave
• Non-birthing parent policies range from 2 to 26 weeks with a median of 12 weeks of fully paid parental leave
• 98% of early stage companies offer a fully paid parental leave policy for birthing and non-birthing parents

Growth stage (200-1,000 employees)

• Birthing parent policies range from 6 to 28 weeks with a median of 16 weeks of fully paid parental leave
• Non-birthing parent policies range from 4 to 26 weeks with a median of 12 weeks of fully paid parental leave
• 95% of growth stage companies offer a fully paid parental leave policy for birthing and non-birthing parents

Late stage and public (1,000+ employees)

• Birthing parent policies range from 4 to 28 weeks with a median of 18 weeks of fully paid parental leave
• Non-birthing parent policies range from 2 to 18 weeks with a median of 10 weeks of fully paid parental leave
• 100% of late stage and public companies offer a fully paid parental leave policy for birthing and non-birthing parents

Tenure and usage requirements for Cocoon customers

Employees are eligible for the Family and Medical Leave Act (FMLA) if they work for a covered employer for 12 months (and meet the 1,250 hour service requirement). We often see the most progressive companies be more generous here – over half of them have removed the tenure requirement completely. This can also be leveraged as a great recruiting tactic, showing prospective candidates that your company is committed to providing an equitable leave experience to all employees. 

• 57% of employer don’t have a tenure requirement at all, meaning employees are eligible for their company’s policy from the first day of employment
• 43% of employers have a tenure requirement for their parental leave policy, and the median tenure is 6 months
• 75% of employers require leave to be taken in a minimum increment larger than one day, with a median minimum of 2 weeks at a time

Our parental leave policy generator helps companies of any size craft a policy in just a few minutes.

Medical leave policy benchmarks

Paid medical leave is less common than paid parental leave within our data set. Across Cocoon customers, about half (48%) offer a fully paid medical leave policy. All of these policies include top-up pay for employees while they’re receiving disability payments so they receive 100% of their normal pay while on medical leave.

• Across all companies the median medical leave policy is 4 weeks
• For early stage and growth stage companies, the median is 4 weeks
• For late stage and public companies, the median is 10 weeks

Caregiver leave policy benchmarks

Paid caregiver leave is even less common, despite the fact that one in five Americans are caregivers and nearly half of all working adults expressed the need to take a caregiver leave. Of Cocoon customers, 19% have a paid caregiver leave policy. 

• Across the companies that do offer a paid policy, the median is 6 weeks
• For early stage companies, the median is 6 weeks
• For growth stage companies, the median is 4 weeks
• For late stage and public companies, the median is 10 weeks

To get started crafting a caregiver leave policy, check out our caregiver leave policy generator.

Looking ahead

As companies look for ways to be employee-first and empathetic, we hope to see a continued increase in comprehensive paid leave policies across all leave types. 

If you’re hesitant that it may be too soon to implement such competitive leave policies, many of the best People leaders craft policies based on where they expect their company to be a year from now. Proactively planning for the future allows companies to attract and retain talent going into the next phase of scale. 

When companies care for their people during life’s most vulnerable moments, employees thrive. By understanding how other companies are managing leave, People leaders can craft policies that are competitive, compassionate, and inclusive.

Now that you have our paid leave benchmarks, follow these 5 steps to start writing your parental leave policy.

Though offering paid leave policies is beneficial for a multitude of reasons, actually delivering on it is where complexities can arise. Depending on several factors – like their company’s policy, where they live, and tenure, to name just a few – a person might receive checks of varying sizes from multiple sources. Money can come from their employer, disability insurance, and state entitlement programs on an irregular, unpredictable schedule. Employees take leave for some of life’s most significant moments, moments they should not have to spend time and effort tracking pay and manually calculating whether everything adds up.

Back in June 2022, Cocoon launched Pay Trackers to show employees when they were paid, how much, and from which sources. While this was a huge step toward reducing stress and uncertainty for those on leave, we learned that employers still wanted more clarity on each individual’s pay details so they could be there to support employees when questions did arise.

Employee pay details at your fingertips

New Pay Insights feature shows People teams a breakdown of all payments made to any employee on leave. Admins can easily view individual employee pay across pay periods, broken down across regular pay, leave pay, and deductions. Use our ‘Upcoming’ tab to view pay projections for an employee’s leave based on their current leave plan and benefit estimates. Admins can also download all leave pay information for each employee with a single click.

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The ‘Details’ tab shows even more context about the employee’s pay for each period: number of days, hourly rate, total compensation, and any pay adjustments. Open Details to see the reason for the adjustment and the impacted pay period. From there, you can also click the pay period itself to review it. Go more in-depth with our demo to see how the feature looks and works.

Tools that help you support your team when they need it most

One of Cocoon’s fundamental goals is to minimize the mental load of going on leave so employees can focus on themselves and their families. Getting paid on leave is rarely straightforward, creating more uncertainty for employees in moments that are often some of the busiest and most stressful of their lives. Intuitive, accessible leave management software tools like our new Pay Insights feature empower People teams with the information and clarity into pay details to show up for their teams in these moments.

The founders of Cocoon saw that even stodgy industries, like banking, underwent digital transformations that simplified daily tasks and amplified more impactful work for employees and end-users. They wondered why this transformation hadn’t yet arrived for those managing the complexities of taking a leave of absence, before realizing they needed to be the ones to bring it into the world. 

Though SaaS platforms for planning and managing a leave are new, the idea of turning to tools and technology to automate, save time, and improve employee experiences is not. Companies offering competitive leave policies without the tools to help employees navigate them are losing time, money, and morale unnecessarily. Here’s what a digital transformation can bring to leave management for people and People teams:

Save time and money on payroll and benefits calculations

“It’s nerve-wracking making sure you’re coordinating everything between federal, state, and local laws, getting it right with payroll, and also informing the employee along the way.” — Gem HR leader

“I was in the hospital on the computer filling out the EDD form because you can’t prefill any of this stuff and if you miss the cutoff you don’t get paid...The payroll calcs are very complicated and to this day I don’t know if I was paid what I should have been.” — Square employee

Despite the fact that more than 15 million people took leave in 2022 alone, and that potentially anyone could need to take a leave of absence, it’s still so complicated. All at once, employers and employees have to tackle eligibility, compliance, insurance claims, payroll—on a strict timeline. If anyone slips up (which is easy to do), it can lead to lost pay or breaking the law. Yet even the experts can be error-prone, because there are so many variables to consider, and they vary by state. 

That’s why it makes more sense to let an algorithm comprehend and codify ever-changing leave laws, so nobody has to undertake this expertise in the spare time they don’t have. SaaS tools like Cocoon can also provide more complete and accurate payroll calculations so HR leaders don’t have to. By making the paperwork filing process clear and flagging benefits leave-takers are eligible for that they might have passed over, this not only keeps everyone compliant, but also helps companies save an average of about $10,000 per leave taker. Best of all, as your company grows and changes, tools like Cocoon scale with you so you can continue to offer competitive and well-run leave policies backed by an excellent employee experience in planning it.

Proactively plan a leave before you take it

“One person going on medical leave told me ‘I’m just not going to do the disability, forget it.’ If someone is forgoing that money, then you know there’s a huge problem.” — OODA HR

“I told my boss and my HR partner that my son was in the hospital. They said all the right things… yet a few days later, I got an email from HR letting me know that my paycheck had been paused, and I was apparently now on unpaid leave. This came as a total shock and added extreme stress to my already impossible situation.” — Product marketing leader

Even if your company has great policies for medical, parental, caregiver, and/or compassionate leaves, that’s only one piece of the puzzle. A leave-taker still has to figure out their budget, timeline, and what the steps to achieving them are—all while preparing to face the situation prompting their leave. To do so, leave-takers are often stuck with outdated information on janky .gov pages, calling 1-800 numbers to talk to a leave management rep, waiting for or sending out mailed documents, or simply trying to piece it together themselves in a spreadsheet at 2am. It leaves them feeling burnt out, intimidated, and not confident when they finally convey their leave to HR and their manager. 

This is again where a SaaS platform for leave management is revolutionary, as it is interactive and responds to different inputs and variables in real time with no extra calculations on the end-user’s part. That means employees can use something like Cocoon’s Leave Options Explorer to map out different timelines, see what benefits they qualify for, and how those interact with their state and company policies. SaaS leave management systems also make it much easier to then share these plans with other stakeholders, like managers and HR, so everybody feels confident about what next steps are, how to carry them out, and seeing them all together in one place. Giving employees access to this information puts the power back in their hands to share when they’re ready, and empowers them with the knowledge they need to make such an important decision.

Be the progressive People team you aspire to be

Even when achieved successfully, the way most companies manage employee leave is not up to today’s standards. It costs us time, money, and relationships in moments of life where we need to support and be supported. Infusing leave management with powerful technology and great design will empower people and People teams to make the right decisions quickly in the face of unforeseen scenarios or big life changes—which is a huge life change unto itself — the digital and real-world transformation we are in desperate need of.

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