As healthcare costs soar, it’s not only individual Americans feeling the financial pain and looking to make trade-offs. Employers are scouring for ways to cut back and generous paid parental leave is among the employee benefits on the chopping block.

Zoom Communications announced tweaks to its parental leave policy to bring the benefit more in line with market norms. Zoom employees who give birth now have access to 18 weeks of paid leave, down from 22 to 24 weeks previously, a spokesperson said. Non-birthing parents receive 10 weeks from 16 weeks.

Zoom is not alone in scrutinizing some of the more generous employee benefits in the market. More changes can be expected as employers set their 2027 budgets and are seeing red over rising healthcare costs. For some companies, healthcare cost increases will run into the low double-digits, according to Rich Fuerstenberg, senior partner in Mercer’s health practice. That’s when the CFO enters the picture, looking for areas where benefits can be pared back. “When that happens, everything is on the table,” Fuerstenberg said.

He’s received a few requests from companies to adjust parental leave programs, especially if their offers are more generous than what competitors typically 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.

The shift also reflects companies’ efforts to align more closely with state-led paid leave programs, which have increased. Many parental leave plans were implemented over the past five to 10 years, so it is natural to see refinement as organizations gain more experience with utilization and cost, according to Shauna Bryngelson, senior vice president of Gallagher’s absence and productivity practice.

“As state benefits expand, often offering around 12 weeks of paid leave, companies are reassessing how their programs align. In many cases, policies in the four-to-12-week range are emerging as a more sustainable balance, supporting employees while maintaining operational consistency,” Bryngelson wrote in an email.

To be sure, benefits consultants don’t expect companies to abandon their paid parental leave programs, in part because it’s too important a benefit to working parents. “The idea that these policies are just going to go away is unlikely. At the level of prevalence that we’re seeing these programs, and as valuable as they are, I’d be really surprised to see them go away. But they’re under scrutiny now,” Fuerstenberg said.

The most generous perks are the first to go

It’s easier for companies to trim a benefit when they are already offering more than competitors, benefits professionals said. Gates Foundation, for example, at one point had a 52-week parental leave, which they trimmed a few years ago to 26.

The national average for paid leave varies, depending on company size and other factors, but most do not offer more than 12 weeks, said JJ Jackson, national absence and disability practice lead at HUB International. “This aligns with a lot of mandatory state-paid family and medical leave programs,” Jackson said.

Carey Wooton, associate vice president of education for the International Foundation of Employee Benefit Plans, said it’s also worth noting that “even with reductions, parental leave benefits in the range of eight to 18 weeks remain comparatively generous within the U.S. context.”

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