Why Continued Equity Vesting During Parental Leave Is Now the Norm

 (and Why Your Company Should Care)

If you’re a growth-stage company—or advising one—there’s a good chance someone on your team is asking: “Should equity vesting continue during parental or maternity leave?” The short answer: Yes. And if you’re not doing it, you’re behind the curve.

What’s the Market Standard?

The latest data is clear: Over 90% of companies do not pause or adjust equity vesting for statutory or paid leaves, including parental and maternity leave. This is true for both stock options and RSUs, according to the 2024 NASPP/Deloitte Tax Equity Incentives Design Survey. Even for unpaid leaves, 83% of companies still don’t adjust vesting. Companies that pause vesting are now the exception, not the rule.

Why Has This Become Best Practice?

Gender Equity: Pausing vesting for parental leave disproportionately impacts women and can be seen as discriminatory. Companies want to avoid policies that penalize caregivers or create gender-based disparities in compensation.

Legal Risk: In the U.S., anti-discrimination laws (like Title VII and state equivalents) prohibit treating employees on protected leave less favorably. In states like California, the risk is even higher due to robust anti-discrimination statutes and a plaintiff-friendly legal environment.

Employee Retention: Today’s top talent expects family-friendly policies. Penalizing employees for taking leave is a fast way to lose them—and your reputation.

Administrative Simplicity: Tracking and tolling vesting for leaves is a compliance and payroll headache. Most companies have decided it’s simply not worth it.

What Are Leading Companies Doing?

Amazon: After employee pushback, Amazon changed its policy to allow vesting to continue during parental leave and up to 26 weeks of medical leave. Previously, they paused vesting for leaves longer than two weeks—now recognized as out of step with market practice.

Apple, Google, Netflix, and others: Vesting continues during parental leave. These policies are widely emulated across the tech sector.

Startups and Growth-Stage Companies: The overwhelming majority follow the same approach—vesting continues during protected leave.

What About the Legal Landscape?

While no federal law explicitly requires continued vesting, anti-discrimination laws (federal and state) create significant risk if you pause vesting for parental leave. If your policy disproportionately impacts women or caregivers, you’re exposed to claims of sex or pregnancy discrimination. In some countries (e.g., UK, Canada, France), continued vesting during protected leave is required by law.

Bottom Line

If your company is pausing or tolling vesting during parental or maternity leave, you’re out of step with best practice and exposing yourself to legal, reputational, and retention risks. The market has spoken: continued vesting is the norm.

Action Items for Employers

Review your equity plan and grant agreements for leave provisions.

Align your vesting policy with market standards—vesting should continue during all protected leaves.

Communicate your policy clearly to employees and managers.

If you’re in a state or country with additional protections (like California), be extra cautious—erring on the side of continued vesting is the safest move.

Want to see the data or need sample policy language? Drop a comment or reach out.

Risk flag: If you’re not continuing vesting during parental leave, you’re not just risking legal trouble—you’re risking your ability to attract and retain top talent.