ADOPTION-FRIENDLY WORKPLACE EMPLOYER TOOLKIT
Our founder, Dave Thomas, started an initiative advocating for adoption benefits in the workplace more than 25 years ago. For him, it was simply a matter of equity — if an employer provides benefits for families because of the birth of a child, why wouldn’t they also acknowledge adoption? He began reaching out to other CEOs and suggested they offer adoption benefits because, as he shared with everyone, “It’s the right thing to do.”
Today, the Dave Thomas Foundation for Adoption continues this legacy by raising awareness about the impact of adoption benefits and providing resources, like this toolkit, to support organizations that are striving to become an adoption-friendly workplace.
Adoption-Friendly Workplace Spotlight: Johnson & Johnson
Jonathan and Megan with their four children,
Elizabeth, Julia, Aiden and Cody
Jonathan, a Director for Patient Data Solutions for Janssen, a subsidiary of Johnson & Johnson, and his wife Megan began accepting foster placements seven years ago with the goal of supporting successful reunifications with each child’s family of origin. Thanks to Johnson & Johnson’s employee benefits, Jonathan was supported throughout his family’s adoption experience when reunification proved not possible for one of their children.
Jonathan’s experience supporting children in foster care has allowed him to introduce impactful change to Johnson & Johnson. He recently helped shape the company’s expanded parental leave policy and worked with the HR and Benefits teams to offer time off for foster parents when a child is placed in their home — in addition to the organization’s adoption leave policy.
ADOPTION BENEFITS – A National Overview
According to the Society for Human Resource Management’s (SHRM) 2023 Employee Benefits Survey, 34% of employers offer paid adoption leave and 25% provide paid foster child leave. Many organizations that offer competitive paid leave for families who adopt also support foster parents through a limited paid leave benefit. In 2022, the average paid leave for foster parents was 2 weeks.
While adoption benefits are a relatively small investment for most organizations, they can have a life-changing impact for families and children waiting for a permanent home.
In fact, a recent study commissioned by the Dave Thomas Foundation for Adoption showed that 64% of Americans say that their employer’s assistance with adoption expenses impacts their decision to adopt. And 68% say paid leave for adoptive parents impacts their decision to expand their family through adoption.
What are adoption benefits?
Adoption benefits are voluntary, employer-funded policies for employees who adopt. Often, these policies include financial reimbursement and paid leave for adoption, among other benefits.
The Family Medical Leave Act (FMLA) also requires organizations with 50 employees or more, and all public agencies, to grant 12 weeks of unpaid adoption leave.
How do employers benefit?
Employers are increasingly offering adoption benefits to:
- Strengthen employee loyalty, retention, goodwill and productivity.
- Gain a competitive edge in recruiting new employees.
- Enhance the organization’s family-friendly image.
- Recognize the need to support adoptive and biological parents.
- Give employees time to bond with their children.
- Make adoption more affordable.
What is an adoption assistance program?
An adoption assistance program is a formal, written plan maintained by an employer for the benefit of its employees. It is a voluntary program not mandated by law. The employer determines:
- Whether the adoption assistance program will apply only to employees who finalize the adoption, or also to those with unsuccessful adoption efforts.
- The amount of financial reimbursement and/or paid leave available to eligible employees.
- Employee eligibility requirements.
An adoption assistance program must meet the following requirements:
- Benefit all eligible employees, not just “highly compensated.”
- Pay no more than 5% of its benefits to shareholders or owners (or their spouses or dependents).
- Give reasonable notice of the plan to eligible employees.
- Provide reasonable substantiation that payments or reimbursements are for qualifying expenses.
The Foundation’s Adoption-Friendly Workplace employer toolkit offers a sample adoption benefits policy and more to help you get started.
Who is eligible for adoption benefits?
Many employers maintain the same eligibility requirements for adoption benefits as they do for maternity, paternity or other organization benefits. Most often, full- and part-time employees are eligible, and the effective date ranges from immediately upon hire to one year of service.
What adoption expenses are covered by financial reimbursement?
Most employers use the Internal Revenue Service (IRS) definition of “reasonable and necessary expenses directly related to the adoption of a child,” which may include:
- Agency fees
- Legal fees and court costs
- Medical expenses for a child not covered by insurance
- Medical expenses of the birthmother
- Temporary foster care expenses
- Travel and lodging expenses
- Immigration and naturalization fees
- Immunization and translation fees
Some organizations also support post-adoption services and counseling.
The Foundation’s Adoption-Friendly Workplace employer toolkit includes a sample adoption benefits financial reimbursement form and more resources for employers.
What tax laws apply to adoption benefits?
Employers should refer to IRS Publication 15-B, Employer’s Tax Guide to Fringe Benefits, which states that financial adoption assistance is not subject to federal income tax withholding, but is subject to Social Security, Medicare and federal unemployment taxation.
A complete summary of tax regulations related to adoption benefits can be found in the Foundation’s Adoption-Friendly Workplace employer toolkit.
What else can employers do to support adoptive parents?
- Connect employees with adoption networks or support groups.
- Educate employees about adoption with workshops or lending libraries.
- Offer flexible work policies to help new parents address pre- and post-adoption challenges.
- Celebrate when employees adopt.
BEST ADOPTION-FRIENDLY WORKPLACE SPOTLIGHT: AMERICAN EXPRESS
“In 2017, I had this aching for a family and knew it was the right time to begin my adoption journey,” said Erin who adopted her son with support from benefits provided by her employer, American Express.
“Thanks to the American Express employee adoption benefit, the financial stress was taken away because they helped cover the cost of the extended hotel stay and legal fees.”
Erin and her son Jameson
Best Adoption-Friendly Workplace Survey
The 100 Best Adoption-Friendly Workplaces list recognizes organizations that are striving to make adoption a supported option for every working parent.
HR professionals: Register for the 2023 survey.