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Family Leave

For Netflix, The Path to Family Leave Wasn't Easy

While Netflix’s trailblazing unlimited family leave policy was celebrated in the press, its path to implementation has required flexibility and the willingness to listen to criticism.

 

Netflix, the world’s largest provider of Internet television, announced its then-revolutionary unlimited family leave plan in August 2015. The new policy meant that employees could take off as much time as they wanted in the first year after a child is born or adopted, while receiving full pay. Almost immediately the plan was lauded as game-changing, trailblazing and radically awesome, and the company’s stock hit a record high price on the day of the announcement.

       Netflix’s Los Gatos Office (Photo: Netflix)

“We want employees to have the flexibility and confidence to balance the needs of their growing families without worrying about work or finances. … Netflix’s continued success hinges on us competing for and keeping the most talented individuals in their field,” Tawni Cranz, chief talent officer at the Los Gatos, California-based company wrote in an announcement on the company’s website. “This new policy, combined with our unlimited time off, allows employees to be supported during the changes in their lives and return to work more focused and dedicated.”

The federal Family and Medical Leave Act requires companies with more than 50 employees to provide their workers with up to 12 weeks of leave, but doesn’t require that the leave be paid, so it’s not surprising Netflix’s paid plan made headlines in The New York Times, Time and The Atlantic. But headlines soon turned to criticism, as reports began to note that the new plan only applied to salaried employees in the company’s streaming division, and not to hourly employees or those in the company’s DVD-by-mail division, DVD.com.

In September 2015, Netflix responded to the criticism first by defending their policy and stating that all Netflix employees received “comparable or better” pay and benefits than those at other companies doing similar work, according to the Huffington Post. At that time, Netflix was offering DVD workers 12 weeks of paid family leave, which, according to the Department of Labor, placed them among the mere 12 percent of private companies in the U.S. that offer any paid parental leave at all.

By the end of the year, after continued pressure from the press, employees and workers’ rights advocates, Netflix revisited and adjusted the parental leave plan. Under the revised program, hourly DVD.com employees would continue to receive 12 weeks of parental leave, while hourly customer service workers would have access to 14 weeks, and hourly team members in the streaming division would receive 16 weeks. This new structure also included maternity, paternity and adoption leave at full pay, whereas the previous plan provided partial pay for maternity leaves only.

When asked about the continued disparity between hourly and salaried employees, Cranz responded by placing parental leave in context with overall compensation and the differing responsibilities between the two types of positions. According to Cranz, creating a culture where employees have the trust and flexibility to meet their job responsibilities on their own terms is usually best aligned with salaried positions more than hourly. “When you think about an hourly workforce, it’s not exactly authentic to say, ‘You have all the freedom to do your job and all the responsibility when you have to clock in and clock out,'” she said.

The path to substantive change in the workplace isn’t always a smooth, straight line. In the case of Netflix’s family leave policy, the ability to balance employee feedback with the realities of the company’s organizational structure ultimately led to a policy that supports parents while ensuring practical business needs are met.