If you’re expecting a baby – or are thinking about becoming pregnant – one of the first things you should do from a financial standpoint is determine the type and amount of leave you’ll be entitled to as a new parent. Knowing how much time you’ll be able to take, and whether you’ll be paid during that time, can help you design both a personal and financial plan for when the baby arrives.
Federal Law Protections
The United States is the only advanced economy in which employees are not entitled to paid sick or maternity leave under federal law. The main federal law governing parental leave is the Family and Medical Leave Act (FMLA). FMLA requires employers with 50 or more employees to provide a minimum of 12 weeks of unpaid leave (in a calendar year) for an employee to care for a newborn child, a newly-adopted child, or sick family member or for the employee to recover from their own medical condition. To be entitled to leave under FMLA, you must have worked for the employer for at least 12 months out of the last 7 years and have worked at least 1,250 hours for the employer in the 12-month period immediately preceding the leave. If you plan to take leave under FMLA, note that the 12 weeks per calendar year is cumulative, so keep track of how many days you’re taking off for medical or family-related reasons prior to the expected delivery date.
State Law Protections
In the absence of a federal law requiring paid parental leave, some states have enacted their own policies. If you live in California, New Jersey, or Rhode Island, you may be entitled to either four or six weeks of paid leave from your job.
Employer Leave Policies
Fortunately, many employers have more generous parental leave policies than the leave mandated by the government, so your starting point will usually be your company’s human resources department. To avoid disclosing information before you’re ready, check your employee handbook. It should indicate the company’s policy on parental leave. In any event, as the delivery date gets closer, talk to your boss about your plans for taking time off and about temporarily shifting your workload to other employees or hiring a temporary replacement. Also speak with your company’s human resources department about any paperwork or procedures that need to be followed to beforehand. If you work for a smaller company without a human resources department, talk to your supervisor about what options you might have.
Note that companies cannot discriminate against fathers; if the company provides maternity leave to new mothers, it must provide similar leave to new fathers. To maximize your time off with your new child, you might want to add your unused vacation days to your parental leave. In many cases, this can significantly extend your total time at home.