Laughing Planet Café has 14 restaurants spread across Oregon and Nevada. Its 280 employees spend their workdays making burritos named after Che Guevara and mixing up salads called Highway to Kale. And now, in a move nearly unheard of in the restaurant world, they will all have three months of fully paid parental leave after they have a new baby.
Laughing Planet's owner and chief executive Franz Speilvogel made the decision last week, after a pregnant store manager expressed concerns that she wouldn't be able to take any maternity leave. "She's entering her final trimester, and she talked about the circumstances of being an employee in my company and what she's faced with," said Speilvogel, whose Portland (Ore.) company didn't previously have any parental leave policy in place. "I told her, let me think about it and get back to you." He was still thinking about it a few days later when President Obama announced that federal workers would now get six weeks of paid sick leave and that he planned to push Congress to extend those rights to everyone else.
According to the U.S. Bureau of Labor statistics, only 6 percent of service workers get any sort of paid family leave at all. The federal Family and Medical Leave Act, which offers 12 weeks of unpaid leave, covers only full-time workers—or about 39 percent of Laughing Planet's workforce.
Laughing Planet's new paid-leave policy will apply to mothers, fathers, and adoptive parents. It will pay employees their full salary, or if they're part-time employees, it'll pay them the average of what they earned in the past six months. "It wasn't a business decision to do this, it was a human decision," said Speilvogel. "But as a business owner, I also think it'll pay off down the road."
At first, Speilvogel wasn't sure he'd be able to pay people their entire paychecks or even offer that much time off. "My executive team and I looked at six weeks of leave, eight weeks of leave, and then I said, you know, let's just go for the full three months. We'll make it work." He looked at the type of people Laughing Planet usually employs, few of whom had children. "The service industry is a very difficult industry to be in and even have a family," he said. People have to work nights and weekends, which means that if and when they do have kids, they often quit.
Speilvogel said it costs about $5,000 in time and wages to train a new employee. "I did the math," he said, and he realized that even if 10 people were out on parental leave at any one time (which would be about 3 percent of his workforce), he could easily have other employees temporarily cover their duties while he continued to pay them for 12 weeks. He'd still be spending less than the $50,000 it would cost to hire 10 replacements.
Then there's the added benefit of employee satisfaction. Speilvogel believes that parental leave leads to healthier parents and babies and thinks people will be less likely to quit Laughing Planet when they have access to leave. That's probably true—a 2011 study of California's paid-leave law found that when low-wage workers were given access to paid leave, 83 percent of them returned to the same company, compared with the 74 percent who had no paid leave.
"I really do think this will be better for us in the long run," said Speilvogel. "But who knows, maybe in 12 months, I'll say, oh no, what have I done?"