Companies have found a powerful new benefit to add to their arsenal of perks: paid time off to care for sick spouses, parents, and children.

As the hiring market has tightened over the past year, companies have beefed up their benefits packages, adopting more generous parental leave policies and student debt repayment benefits to attract and keep employees. And the benefits arms race continues apace. In the past month, two large employers are leading the way with a new benefit, offering what is generally called elder care but includes spouses and kids as well. Deloitte will give its employees 16 weeks of paid time off to care for sick relatives. Vanguard Group will allow up to two paid weeks.

Few companies offer paid elder care. The Society for Human Resource Management's 2016 benefits report found that 2 percent of companies subsidize such care. While 75 percent of the more than 1,000 companies surveyed for the Families and Work Institute's 2014 National Study of Employers said they provide time off for employees to provide elder care without jeopardizing their jobs, it's often unpaid.

The Family and Medical Leave Act, the federal law that covers maternity leave, requires employers with 50 employees or more to provide 12 weeks of unpaid time off "to care for an immediate family member (spouse, child, or parent) with a serious health condition." Only 12 percent of U.S. private sector workers have access to paid family leave through their employer, according to the Bureau of Labor Statistics, and that doesn't necessarily include elder care.

As baby boomers age out of the workplace, their millennial children, who now make up the largest share of the labor force, will have to care for them. Much like raising a newborn, taking care of a sick or dying relative takes a great deal of time and emotional energy. If a parent has an unexpected terminal illness, for example, a child might need to (or want to) take a significant amount of time off to care for him or her and say goodbye.

Employees stress "the need to get to doctors, to make arrangements to interview care providers, and how difficult that was," said Kathy Gubanich, the head of human resources at Vanguard, of the company's own workers. Often, she said, what people need is "a little bit of time to figure all of these things out."

Even if most young workers haven't experienced these crises yet, they know they will be grappling with them, and most can't afford to jump in unpaid. A Deloitte survey found that 88 percent of respondents are for expanding leave policies to include care beyond maternity and paternity leave.

For companies, offering paid elder care is not only a hiring and retention play but potentially a productivity booster. It's tough to balance working with caring for—or just worrying about—a sick loved one. One study by MetLife estimated that U.S. businesses are hit with $17.1 billion in annual productivity losses from full-time employees doing intense caregiving for family members.

Both Deloitte and Vanguard are using the Family and Medical Leave Act as a framework for administering the benefit. Employees have to apply for the time off, showing that the family member has a "serious illness." As defined by the act, that is a condition involving inpatient care or continuing treatment by a health-care provider.

"It essentially says someone has got an illness that incapacitates them and you, as a caregiver, can take time off to help them," said Mike Preston, Deloitte's chief talent officer. Deloitte's policy requires that employees take no less than three consecutive days off, because it's meant for serious care, not for quick stints to pop in on the person or pick up a few things. Workers can spread the 16 weeks out across the year.