Economy

Why Spotify’s Family Leave Policy Is Actually More Generous Than Netflix’s

CREDIT: AP Photo/TT/Janerik Henriksson

Spotify founder and CEO Daniel Ek

On Thursday, online music streaming company Spotify announced that it will offer all full-time employees around the globe six months of parental leave at their full pay. The policy can be used until a child turns three. Both mothers and fathers are encouraged to take the full time off, although there is also an option to split the leave up into chunks over that time frame.

The announcement makes Spotify the second-most generous technology company in the United States when it comes to parental leave benefits, at least on paper. In August, Netflix announced that salaried employees will get unlimited leave for up to a year. In theory, that gives new parents the ability to take an entire year off.

But the reality could very well be different. Giving unlimited time off doesn’t actually send the message that employees should take the full amount of time allotted, as with Spotify’s benefit. If new parents are given a clear six months and encouraged to take the whole time, they know they are leaving something on the table if they only take five. But with leave that has no parameters, taking less than a year may not feel like giving up something that an employee has earned. Americans are already notoriously bad at taking all of the time off that they get through work.

That’s how it’s played out for a number of companies that have tried out unlimited vacation days. Kickstarter recently ended such a policy, capping time off at 25 days a year, to give its employees a better sense of how much they should take. Employees at a tech company in Berlin were so hesitant to take days that they ended up more burned out. Tribune Publishing rescinded an unlimited time off policy shortly after introducing it after employees complained and threatened to sue.

With the new policy, Spotify is also more inclusive than Netflix. Its announcement makes it clear that anyone who works for the company full time will be entitled to the benefit, as will anyone who had a child since 2013. Netflix, however, only offers the unlimited paid leave policy to its salaried employees, leaving out the hourly workers in its DVD and customer service segments.

The imbalance at Netflix reflects an imbalance throughout the American economy. While just 12 percent of the workforce is offered paid leave, those at the top of the income scale are more likely to get it, while those at the bottom, who are more in need of pay when they take time off, are least likely. Employees outside of the tech sector altogether, of course, may not be lucky enough to have employers in an arms race to offer generous benefits and attract talent.

One way to ensure that all new parents in the U.S. can take time off would be to create a national paid family leave program. There are a number of models the U.S. could choose to follow; one model, a social insurance program that employees and employers would pay into through payroll taxes, has been introduced in Congress. That way, anyone would have a minimum of paid time off to recover and bond with a new child.

Spotify’s roots are in Sweden, a country that guarantees that employees get up to 480 days of paid leave. It also requires fathers to take at least two months or forfeit his benefits, which has increased their use of leave and helped the country’s working mothers.