Healthcare costs are eating up firm budgets fast. Some firms are cutting paid parental leave to keep up.
Others are going the other way, growing leave even as costs rise. Both moves are going on at the same time, in the same job market.
Some employers are looking at low double-digit jumps in healthcare costs heading into 2027. That data point comes from Rich Fuerstenberg, senior partner at Mercer's health practice.
When CFOs see those numbers, every benefit gets a hard look. Fuerstenberg said he has gotten requests from firms to scale back parental leave. The cuts tend to hit firms whose plans are richer than what rivals offer.
"If I can't show why being above market adds value, then it's going to be considered fat from a show-me-the-numbers perspective," he said.
Think of parental leave like a fancy cable add-on. When the bill goes up, the first thing trimmed is the channel nobody uses.
Zoom told CNBC that birthing employees now get 18 weeks of paid leave. That is down from a previous range of 22 to 24 weeks. Non-birthing parents now get 10 weeks, down from 16.
The firm said the policy was updated to match peer firms.
Deloitte is reportedly halving parental leave for some employees starting in 2027. The plan drops to 8 weeks from 16, per Business Insider. The cuts hit non-client-facing roles like admin, IT, and finance.
There is still no federal paid leave law in the U.S. The Family and Medical Leave Act covers up to 12 weeks of unpaid leave.
Fourteen states plus D.C. now run their own paid family leave programs. Most offer around 12 weeks of paid time, per the Bipartisan Policy Center.
Even with the recent cuts, paid leave plans of 8 to 18 weeks are still pretty rich in the U.S. context. That call comes from Carey Wooton at the International Foundation of Employee Benefit Plans.
The Gates Foundation made the same move a few years back. It trimmed paid leave from 52 weeks down to 26.
Plenty of firms are heading the other way. A Brown & Brown survey of 1,241 employers found 71% offer paid parental leave for both birth and non-birth parents. The benefit goes beyond what state law requires.
Of that group, 60% are growing the length of the benefit.
Starbucks expanded paid leave for hourly workers in March 2025. Birth parents now get up to 18 weeks at full pay, up from six weeks. Non-birth parents get up to 12.
Benefits experts also flagged risks for firms that cut too hard. JJ Jackson at HUB International said paid leave has real ROI through lower post-leave attrition.
WTW's Alex Henry warned that loss of trust can hurt a firm's brand. The damage can last long after the savings show up.
Parental leave is a small line item on a corporate budget. But it is a tell on which way employers are leaning as healthcare costs grind higher.