> And also there's a big ethical question here if you create an excemption for small business, because you create a two class workforce where parents in small companies lack what is arguably a very fundamental right.

The way I see this, the fundamental right here is to have paid parental leave in general, not a right to have it at any particular workplace specifically. Thus, so long as those who need it can get a job that offers it, I don't see any pragmatic reason to require all businesses to do so. So long as it's clear in advance - so people who e.g. don't plan on having children can go seek employment with small businesses. It's not an insignificant part of the population, so why remove an option for them?