Maternity Leave Basics

The Family Medical Leave Act (FMLA) went into effect in 1993 ensuring your job would be protected for up twelve weeks for medical leaves of absence including maternity leave.  Beyond the FMLA, employers and employers’ states occasionally expand on the benefit.

Most people outside of HR don’t realize that compensation during maternity leave often falls under short-term disability (STD) insurance since it falls outside of the description typically covered by health insurance.  However, in the absence of a paid maternity-leave program, STD replaces some income for up to six to eight weeks, the length depending on the type of delivery.  FMLA doesn’t itself require compensation during leave; when the law does apply, it merely ensures a job will still be available for the employee up to twelve weeks.

Whether you have a formal maternity-leave program or are thinking about one, here are some tips that will be helpful for you and your employees:

  • The FMLA protects an employee if
    • He or she works at a company with 50 or more employees within 75 miles of the employee’s workplace
    • The employee worked there for at least twelve months and
      • For a minimum of 1,250 hours during the twelve-month period preceding the leave.
  • Only 16% of private employers fund paid maternity leave programs. (2014 Working Mother study).
  • Some facts about STD policies:
    • Some are paid by employers, others may be partially paid by employers, offering an employee the ability to purchase additional coverage.
    • Often require the employee to foot the bill or to purchase those policies before the employee becomes pregnant.
    • Typically STD policies cover only a portion of an employee’s salary during their leave.
    • Some states have disability laws that cover a woman’s pregnancy and the birth of a child and you can learn about those states’ laws here: New York, New JerseyCalifornia, Illinois,  Hawaii and Rhode Island.
      • In New York, beginning at 50% of the employee’s wage, limited to 50% of the average wage throughout the state—for some period—in New York 12 weeks; in California, six. At least one city, San Francisco, has augmented its state’s program by requiring employers to pay the remainder of the employee’s salary for the applicable period—in California the benefit runs for 6 weeks.
  • The employer must continue to keep the employee on its health insurance plan while an employee is on FMLA, provided the employee pays the employee portion of their health insurance. However, the company may have the legal right to ask for the reimbursement of health insurance premium payments if the employee does not return after FMLA leave.
  • FMLA does not require accrual of benefits or time toward seniority when an employee is on leave.
    • This applies to vacation accrual, qualifying for raises based on seniority, participation in a 401(k) plan or the vesting of a employer’s matching investment, or stock options.
  • Employees cannot contribute to a 401(k) or flexible spending account while on FMLA leave because they’re not receiving a paycheck from the employer and can’t contribute pre-tax dollars.
  • Most employers that offer fully-paid, maternity leave (that is, not through STD policies) also pay to cover employee benefits during this period.

You can learn more about what other companies are offering from this crowdsourced maternity leave policy resource center.