The Pregnant Worker Fairness Act (PWFA), recently implemented at the federal level, will add another layer of support for women and any worker who can conceive, helping institutions retain talent and mitigate the motherhood penalty at work.
The goals of PWFA are to provide basic accommodations for workers, and to mitigate the costs of lack of accommodations. For example, without adequate support, mothers leave the workforce, or transition to part-time roles, more frequently than fathers. Gaps in employment often dampen long-term income potential throughout one’s career and into retirement, and job switching can reduce one’s likelihood of rising the corporate ladder into leadership. For these reasons and more, motherhood and disproportionate care responsibilities at home cause a “penalty” for wages and promotions, contributes to the gender pay gap, and diminishes potential for equity at all levels. Relatedly, with worker supportive policies, employers can avoid the high costs of turnover related to recruitment, training, and loss of potential leaders.
In finance specifically, research shows a “broken rung” for women, and especially women of color, to climb each step of the corporate ladder. Not for lack of interest – women comprise more than one half (52 percent) of entry level positions, but only 27-28 percent of senior VP or C-suite executives. Additionally, only one quarter of corporate board seats are held by women, despite women comprising nearly half of the workforce.
Despite broad evidence that diversity on teams, within organizations, investment committees and boards is of benefit to productivity, innovation, and returns, without policies in place not all employers are doing all they can to attract and retain all workers. Not only is this a DEI issue, but doing all we can to promote equity and inclusivity is an economic and organizational best practice.
“Employers implementing laws like the Pregnant Workers Fairness Act, and other policies that support working families, must be intentional about the way those policies are implemented,” said Jocelyn Frye, president of the National Partnership for Women & Families. “Culture shifts within organizations take time and the needs of workers must be centered from adoption to implementation and beyond to make rights a reality for pregnant and parenting workers.”
Thirty states and localities had accommodations laws in place but now, due to the PWFA, all public and private sector employers with more than 15 employees must provide accommodations that are deemed reasonable1 for one’s conditions, related to pregnancy, childbirth, or related medical conditions.
Providing accommodations such as the law now requires, should contribute to all institutions’ diversity, equity, and inclusion (DEI) efforts to address the myriad gender gaps throughout the higher ed, nonprofit, and asset management workforce.