Beginning January 1, expectant mothers will receive eight weeks of maternity leave at full pay, an increase from 80%. They can also take an additional eight weeks of paid bonding leave for a total of 16 weeks. Fathers, same-sex spouses, and domestic partners also are eligible for the new bonding benefit.
The company will also provide eight weeks of paid family care leave so workers can assist a seriously ill spouse, child, or parent, as well as 40 hours of sick time each year.
Marcia Morales-Jaffe, PayPal's chief people officer, said the changes are designed to promote healthy living and to give the company's nearly 10,000 U.S. employees more control over their lives.
"These programs include taking time to celebrate a birth or adoption, to care for a seriously ill family member, or simply to take a couple of days rest when needed," she said in a blog post.
The news comes at a critical time for American families: Under the Family and Medical Leave Act (FMLA) of 1993, qualifying American are guaranteed 12 weeks of "reasonable" leave for certain family and medical situations including the birth or adoption of a child and to care for a family member with a serious health condition.
While the law requires companies with 50 or more employees to provide new parents with 12 weeks of leave, it doesn't require this leave to be paid, and the policy is also restricted to full-time employees who have been with the company for more than a year, which, all told, applies to about 60% of workers in the US.
Ellen Bravo, executive director of Family Values @ Work, says she's especially pleased PayPal went beyond time for new parents to include paid family leave as well.
"Even those who aren't parents have parents or partners or other loved ones who may need care. PayPal's policy gives all of its employees the ability to make the right choice for their families without jeopardizing their economic security," she explains.
She notes, however, that while the move is heartening, PayPal's employees represent a mere fraction of the population.
"We know that voluntary action alone will not be enough," she says, referencing the proposed Family and Medical Insurance Leave Act before Congress that would provide up to 12 weeks of paid leave each year to qualifying workers for the birth or adoption of a new child, the serious illness of an immediate family member, or a worker's own medical condition.
Bravo tells Business Insider that with a federal family and medical leave insurance fund, employees and employers would pool small contributions so affordable leave is available to any employee.
Workers would be eligible to collect benefits equal to 66% of their typical monthly wages, and employees and employers both would contribute about $1.50 per week for a typical worker.
We've already seen similar policies at work on a state level.
In 2004, California became the first state to implement a paid-family-leave policy that enables most working Californians to receive 55% of their usual salary (up to $1,104 per week) for a maximum of six weeks.
According to a report last year from the President's Council of Economic Advisers, more than 90% of employers affected by California's paid-family-leave initiative reported either positive or no noticeable effect on profitability, turnover, and morale.
"Only a public policy solution will ensure that every family can welcome a new child or deal with a serious illness without experiencing financial chaos," Bravo says.