Maternity Leave Benefits – What Are Your Small Business Obligations and Options? - The University of La Verne Small Business Development Center (SBDC)
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Maternity Leave Benefits – What Are Your Small Business Obligations and Options?

Do you know what your legal obligations are to provide maternity leave to your employees? There are laws that dictate what maternity leave benefits you should be providing to your employees. However, they don’t apply to all business owners.

For example, under the Family and Medical Leave Act (FMLA), certain companies are required to provide unpaid, job-protected leave for family and medical reasons with continuation of group health insurance under the same terms and conditions as if the employee had not taken leave. This includes 12 workweeks of leave for the birth and care of a child in its first year.

However, FMLA only applies to companies with more than 50 employees – a fact that excludes many small businesses and their employees. 

Federal law aside, your state may have more favorable laws for maternity leave. In California, for example, women may collect state temporary disability payments of about two thirds of their wages for the time during which they're physically disabled due to pregnancy and childbirth (usually six to eight weeks). To find out what laws apply in your state, check out this list of State Pregnancy, Childbirth, and Adoption Leave Statutes published by the National Conference of State Legislatures.

Should You Provide Maternity Leave if the Law Doesn’t Require It?

If your business is not covered by FMLA or state laws, what steps can you take to ensure that employees get the appropriate level of maternity leave?

Providing maternity leave is a smart option for small businesses.  Even if FMLA does not apply to you, according to a U.S. Department of Labor survey, providing both maternity and medical leave is proven to make a positive impact on the lives workers without placing an undue burden on employers. Abuse of these policies is also much lower than expected, and 90 percent of workers return to their jobs after taking FMLA leave.

Setting a Maternity Leave Policy

If you decide to offer maternity leave benefits (and assuming you don’t already have to comply with federal or state maternity leave laws), the FMLA and state laws are useful models on which to base your policy. Consider the following guidelines (as set by FMLA):

  • The employee has been in your employment for at least 12 months and works a regular work week (FMLA requires an average work week of around 24 hours to be eligible, although state policies often don’t require an hourly minimum).
  • The policy applies to both men and women to give them reasonable time to bond with the child (newborn, adopted or fostered).
  • The leave must be taken as a continuous block of leave.
  • Determine the amount of time off you wish to offer and whether it will be paid, unpaid or paid in part. FMLA allows for up to 12 weeks a year. State laws vary between 6-12 weeks.

Whatever you decide, apply your policy consistently with no special favors for certain employees. Include your policy in employee handbooks and terms of employment.

If you think this will be too much of a stretch for your business, consider alternatives such as allowing new parents to work from home or part-time during the initial weeks of new parenthood.

Prepare Your Business

The thought of doing without any employee for several weeks can be daunting, but there are a few things you can do to ensure your business stays productive during an employee’s period of extended leave:

  • Get High Performers to Step Up – If someone on your team is looking for an opportunity to take on extra responsibility or has shown an aptitude for growth, consider asking them to step into the shoes of employees who take maternity leave. Plan the transition in advance and be sure to have a plan to hand back the role when the absent employee returns to work so that they don’t feel that the position is in jeopardy.
  • Cross Train – Cross training should be a key part of any business and will help your business handle the strain of short and extended leave more seamlessly. Your employees don’t need to be able to do everything; instead, spread the load by Identifying a back-up team member for certain key tasks.
  • Hire Independent Contractors – Contractors specialize in being able to come into a company and learn the ropes fast. It’s always worth building relationships with contractors across several disciplines just to ensure you have coverage – both for maternity/medical leave situations or to help out when you need an extra pair of hands.

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