Figuring out your parental leave options

Considering different parental leave options

So you’re expecting a baby—congratulations! While you’re busy making many plans for their arrival, one thing that shouldn’t be overlooked is considering your options for parental leave: the time off from work surrounding the arrival of your baby. If you have accrued sick leave, that could be one way to take time off after the arrival of your baby—but that will rarely be enough for most new parents.

Here are a few common types of parental leave that many workers in the U.S. are entitled to if they are full-time employees. Often, maternity/paternity leave policies are spelled out in an employee handbook—but a quick conversation with HR can also help you sort out your options and figure out how long you’ll have off after baby arrives. It can also help you figure out how much of that leave can be paid leave, unpaid leave reimbursed by disability coverage of some type, or unreimbursed unpaid leave.

Understand that leave entitlements vary by federal, state, and even local mandates—and the size of your employer and even the size of the local office can make a difference. Parental leave is a complicated topic, and this article is only intended to provide you a starting point for your own research. Please do not rely on this article as legal advice, or as confirmation of what leave you’re personally entitled to.

Option 1: Employer-provided leave

Your employer can opt to create their own maternity and paternity leave policies, which may offer 12, 16, 20, or even 24 weeks of paid time off to new mothers. A growing number of companies are now offering paid paternity leave for fathers, though typically not as long as maternity leave (think 6 or 8 weeks). Paternity leave doesn’t always need to be taken immediately following the birth of the child—if this is the case for you or your partner, consider stacking your time one after the other to maximize how long a parent can stay home with the new baby. 

Option 2: Family and Medical Leave Act (FMLA)

This is one of the most common types of parental leave. A federal policy, FMLA entitles employees of qualifying companies to take 12 weeks of unpaid leave following the birth or adoption of a child. With FMLA, your job is protected and your healthcare coverage remains uninterrupted during your leave.¹ But, you will have to forego your paycheck and may need to pay some healthcare premiums out of pocket in some circumstances. Make sure you’re budgeting well in advance of baby’s due date so you can save what you need for this time. 

Read more: How this budgeting tool can help you get by with less (or no) income

Option 3: State-sponsored paid leave

Six states—California, Massachusetts, New Jersey, New York, Rhode Island, and Washington, plus the District of Columbia—guarantee paid family leave, but you may need to pay some healthcare premiums out of pocket. In New Jersey, for example, eligible employees can collect 85% of their weekly pay, up to $881, for 12 weeks after the birth of a child. The pay is funded by paycheck deductions for New Jersey workers.²  If you live in one of these states, this is a great alternative to unpaid FMLA. But be careful to determine whether this state-guaranteed leave runs concurrently or consecutively with the FMLA option. It’s best to know your options beforehand!

Option 4: Short-term disability

Many employers offer short-term disability—in fact, it’s required in California, Hawaii, New Jersey, New York, and Rhode Island—which provides some compensation if you have an injury or illness and can’t work.^{Disclosure 3} Sometimes, the birth of a child is a qualifying event—but many employers choose to exclude it from their short-term disability coverage and have a separate policy for it. The pro of short-term disability is you can get paid for your time off. The con? Your job isn’t necessarily guaranteed at the end of your leave outside of FMLA and other similar state statutes.

Option 5: Nontraditional leave

Of course, your work situation may not lend itself to a traditional leave policy—perhaps you’ve been at the company under a year, you’re a contract employee, you work in the gig economy, or you freelance for multiple employers. In these instances, your leave may have to be negotiated with your employer, or you may be able to set it yourself. If this is the case, it’s wise to start saving early for a potential lapse of pay because of unpaid time off. 

Which parental leave option is right for you?

The answer to this question is different for everyone, depending on which state you live in, the size of your company, what its benefits cover, and the nature of your job. The best way to get clarity is to check with HR months before the arrival of your child, so you’re clear on how parental leave is handled. When you plan well in advance and everyone is on the same page, it’ll make things much smoother so you can focus more of your energy on your growing fam.