Suppose you're running a startup and you have 12 employee-months worth of runway left before you'll need to show a concrete proof point to close the next round of funding or, preferably, get to cash-flow breakeven/Ramen-profitable.
Your product is inherently labor-centric. Your employees/team-mates are your best and only hope to produce the product.
In that situation, would you rather be using your last 12 person-months of runway paying your employees to work on the product or paying them to not work on the product and instead raise their own infant child?
Would your company be materially less likely to succeed if one of your employees had a new child and took 15-30% of the remaining runway while providing no benefit to the product? Probably.
What's the mechanism by which a company would be financially ahead with such policies? Would you personally be willing to work for less pay in order to work at such a company? I can agree that employees who use such policies might be much more likely to stay, but I wonder if employees who carry the load while the new parent is on leave (but their position not filled, so all the burden falls to the rest of the team) might be less loyal?
I'm a parent of 2; my wife took the statutory maximum FMLA leave with each of them; her employer had a generally generous paid leave policy, and I'm not anti-kid by any means. I am anti-regulation in general though...
These policies may be breakeven or profitable in the long-run; I don't know. I do know they present a period of unprofitability in the short-term. And when they are gender-specific or even primary-provider-specific, they can manifest themselves as hiring biases against those people most likely to use the policy.