While some states have passed legislation ensuring paid family leave for employees at larger companies, many new parents have to make do with a combination of vacation time, sick days, and short-term disability if they want to be paid after the birth of a baby.
Read on to find out what parents may be entitled to based on state regulations and company policy, and how you can maximize your benefits so you can get paid while on maternity leave.
Table of Contents
Key Points
• Some states have legislation ensuring paid family leave for employees at larger companies.
• Paid maternity leave typically offers 60% to 80% of full-time pay.
• Only 27% of civilian workers had access to paid family leave in 2023.
• Federal workers receive 12 weeks of paid family leave.
• The average company-provided paid maternity leave is 10.5 weeks.
What Is Paid Maternity Leave?
Paid maternity leave (or paternity leave) refers to the time off with pay that some companies grant employees welcoming a new baby or adopted child. Workers often receive only a percentage of their full-time pay, typically 60% to 80%, with limits based on the statewide average pay.
In the United States, businesses are not legally required to give employees paid maternity leave. According to the Bureau of Labor Statistics, only 27% of civilian workers had access to paid family leave in 2023. The U.S. is the only wealthy nation in the world that doesn’t mandate paid parental leave.
Fortunately, 13 states and the District of Columbia have passed legislation guaranteeing paid parental leave. Two other states (New Hampshire and Vermont) do not legally guarantee the right to paid leave but they do provide a voluntary opportunity for workers to purchase insurance that covers paid leave. Federal workers nationwide are granted 12 weeks of paid family leave.
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How Long Is Maternity Leave?
Companies that voluntarily provide employees paid parental leave offer an average of 10.5 weeks. Because many parents find this inadequate — experts recommend 3 to 6 months — even employees with paid leave often extend their leave with vacation time and sick days.
Globally, the average paid maternity leave is 18 weeks.
Benefits of Paid Family Leave
Research shows that paid family leave offers many benefits to parents and children. In one sense, the extra income helps families over the longer term, especially in lower-income households.
In another way, the time families spend together boosts the health of parents and children. Mothers are able to fully recover from childbirth, which can take six to eight weeks. And a child’s health is strengthened by the extra bonding time, regular breastfeeding, and reduced exposure to infectious disease.
Paid family leave may also cover other situations, including:
• Adoption or foster child care
• Care of a spouse, child, or parent with a serious health condition
• A personal serious health condition
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What Is the Family and Medical Leave Act (FMLA)?
The Family Medical Leave Act (FMLA) is a federal law passed in 1993 that grants unpaid but job-protected family leave for eligible employees of larger companies. Individuals can also take time off to care for any family member with a serious health condition.
The law is designed to help workers cope with emergencies that may occur without having to worry about losing their job. It also ensures that leave is available on a gender-neutral basis and supports equal employment opportunity for women and men.
FMLA Maternity Leave Eligibility Requirements
For an employee to qualify for FMLA benefits, both the employer and employee must meet certain requirements.
Employer Requirements
FMLA applies only to employers with 50 or more employees (who have worked at least 20 weeks in the current or preceding calendar year) within 75 miles.
Worker Requirements
An employee must have worked for their company for at least 12 months and worked 1,250 hours within the past 12 months. Some part-time workers may not qualify.
State Laws for Maternity Leave
As noted above, 13 states and the District of Columbia have passed paid parental leave legislation, including California, Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, and Washington, plus the District of Columbia. Benefits and eligibility vary from state to state.
Ways to Extend Maternity Leave
Traditionally, women without adequate maternity benefits have made do by cobbling together vacation and sick days, short-term disability, and unpaid leave. More recently, working from home — sometimes on a reduced schedule — has allowed parents to extend their time at home with pay.
You may want to search for a parental leave consultant in your state, such as MilkYourBenefits.com in California. For a fee, these advisors can provide up-to-date information on family leave law and the benefits you may qualify for.
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How to Prepare for Maternity Leave
It’s a good idea to prepare financially for maternity leave well in advance. Put away money and save for your baby. Here’s a rough timeline to help you plan for the big event.
1. Research State Laws and Company Policies
Before you announce that you are pregnant, find out what your company and state rules are for maternity leave. You can also look into how your medical insurance will work while you are out and how to add your baby to your plan. Check whether your premiums will go up.
You don’t have to inform your employer at this early stage. Your company should have an employee handbook that outlines family leave benefits, or it might be written into your contract.
If you experience pre- or post-natal health problems (such as high blood pressure, gestational diabetes, preterm labor, or C-section), you might qualify for short-term disability. However, know that disability benefits for pregnancy-related reasons are available only in some states.
2. Develop a Maternity Leave Plan
Notify your employer of your pregnancy as you begin to show. Prepare for negotiating your leave by creating a plan for coverage while you are gone. For example, suggest a colleague you can train before you take leave. Explain how you plan to keep in touch with work while you are out. Read up on the motherhood penalty to understand how your career and financial situation may be affected and how you can prepare.
Company maternity leave policy is not set in stone. You can negotiate with your employer to extend your paid time off, or perhaps propose a work-from-home or part-time arrangement.
Your boss may not agree with your plan, so consider it a jumping off point. One tactic is to present to your employer two or three options that you can live with. Your supervisor may well pick one of them. Finally, put it in writing and have it signed so that your employer cannot renege.
3. Start Planning Your Budget
Once you have a general idea of your income during maternity leave, prepare a new budget that includes all of your anticipated expenses. Check out tips on how to budget on a fluctuating income and think about other things that may change your financial situation in the next year. Will you need a home loan while on maternity leave, for example?
A budget planner app can make the budgeting easier because it tracks your expenses for you and gives a breakdown of your spending by category. A grocery budget planner may come in handy as well.
4. Write a Plan for Your Replacement
Before you write out instructions for those who will cover for you while you are gone, have a discussion with your teammates to make sure they are on board. Include in your instructions the estimated dates that you will be gone, who will be responsible for what, and how you will communicate with your team (whether you will take part in meetings remotely, etc.).
The Takeaway
FMLA requires employers with 50 or more employees to offer up to 12 weeks of unpaid maternity leave, but only about one in four private companies offers paid maternity leave. Paid time may end up being cobbled together from a combination of vacation time, sick days, short-term disability, and work-from-home time. Make sure you carefully research the benefits that you’re entitled to based on state regulations and company policy.
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FAQ
What questions should I ask HR before going on maternity leave?
Ask HR what benefits you are entitled to and how your health insurance will change after the birth or adoption. It’s also important to ensure the required forms are completed and any negotiated agreements for maternity leave are laid out in writing and signed by your employer.
How should you prepare financially for maternity leave?
In an ideal world, you would start saving for the baby before you are pregnant. Once you have negotiated your maternity leave and have an idea of your income, create a new budget that includes baby expenses.
Also check whether you qualify for any tax credits such as the Child Tax Credit, the Child and Dependent Care Credit, or the Adoption Credit and Adoption Assistance Programs. Taking out a College 529 savings plan for your child may have tax advantages.
What is short-term disability insurance and how does it impact maternity leave?
Short-term disability is an insurance program offered by some employers. Policies vary, but you might be entitled to 50% of your income or more for up to six weeks after giving birth if you have a C-section or experience complications. Check with your staff handbook and your HR department to find out if you might be eligible for short-term disability.
Photo credit: iStock/Maria Korneeva
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