Setting up your small business' first maternity leave policy

Setting Up Your First Maternity Leave Policy

Posted June 4, 2015 by Jacob Donelly in Benefits and Perks
Maternity leave can be a first for many founders. This is a quick guide on how to set up a legal and fair policy.

Many people, at some point in their lives, will decide that they want to settle down and have children, whether biologically or through adoption and foster care. And for anyone that has ever been a parent, those early weeks and months with that new child are pivotal to creating schedules, learning new behaviors, and everything else that goes along with being a new parent.

In the United States, there is one main law that informs maternity leave policies: the Family and Medical Leave Act (FMLA). Under FMLA, if you have 50 employees or more, you are required to provide twelve workweeks of unpaid leave if one of your employees has had a newborn child and/or if your employee adopted or took a child in through foster care. These twelve weeks, while unpaid, must be protected for the employee. That means that they cannot be replaced for any reason during those twelve weeks.

In addition to FMLA, each state can determine their own family leave policies and they do. The only three states to offer paid family and medical leave though are California, New Jersey and Rhode Island. To learn more about different states requirements, check out this break down.

What Is Legally Required During Maternity Leave?

The very minimum that you have to offer for a maternity leave is the 12 weeks of unpaid, job-secure time off. And, while I continue to call it maternity leave, it is important to understand that this also includes paternity leave. Mothers and fathers are both allowed to leave work after a child is born to take care of them.

The basic rules stipulate that an employee must have worked for that company for at least 12 months and, in the last 12 month period, must have worked at least 1,250 hours. Further, the 12 weeks of time off must be offered in one lump break rather than broken out over the year. The 50 employee number is also contingent on all 50 being within 75 miles of each other. These are the minimum requirements.

Formulate Your Own Maternity Leave Policy

At a minimum, we highly encourage following the guidelines above. But to stand out, you can try to create a more progressive maternity leave that allows for some level of consistency for the employee, even while out. Offering to pay for a certain amount of time would go a long way to alleviating some stress for employees. For example, you could offer to pay for 50% of the maternity leave, which would effectively be like offering them 6-weeks of paid vacation.

While many companies would find it difficult to pay for this, for those that have the resources, it would give you a leg up on other employers. Deciding whether it is all unpaid, paid-in-part, or fully paid is a decision you have to make while looking at your finances. But like all benefits, the more generous you are the higher quality candidate you’re likely to get.

The Policy and Preparations

Once you have determined what, exactly, the policy is going to be, it is important to actually put it down on paper. We’ve talked about creating an employee handbook in the past. What you should be doing is taking that plan and putting it right into the handbook. Then get every employee to sign off that they had received the amended addition so that there is no confusion.

With the policy on paper, now you have to prepare for the time when an employee needs to take it. According to the law, FMLA-covered employers can mandate that employees let them know within 30 days of their anticipated leave. Typically, a form called the WH380 is used that ensures the employees request for time off is in the system, protecting both the employee and the employer.

One thing to understand: you can’t force someone to take a maternity leave. If an employee decides that they want to take a few days of sick time to have the baby and then return to work, that is their choice. Your job is to ensure that they know their job is safe and that you will welcome them with open arms when they return.

How Do I Keep The Business Humming When Someone Is Gone For 12 Weeks?

Preparation is not just about having forms filled out. Just because your employee is taking time off doesn’t mean that the business can come to a stop. Therefore, you need to ensure that the rest of the employees are ready for this departure. There are a few ways that this can be done.

The first is to find employees that are looking for more responsibility and give it to them. They’ll effectively be doing two jobs at once, but it would be a great way to learn new skills for a newer employee. Ensure that there is time spent before the employee leaves on maternity leave where she teaches the temporary replacement.

The second is to have everyone learn everyone else’s job. What this means is that your writers might also double as customer support. Your developers might also answer customer emails. And your customer support might double as an occasional editor. These are all examples, but what you see happening is there being support for when someone leaves.

Finally, find it in your budget to hire some independent contractors. They can handle projects that need to get done during that 12-week period and you won’t need to worry about onboarding new employees and covering insurance. For example, if the person leaving is your primary writer, just hire a freelancer for that 12-week period. And who knows?

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How Work-From-Home Policies Can Help

There is one other option, though, that you might want to consider and that’s offering employees the choice to just work from home for those 12 weeks. I have a colleague who took significant time off when his children were born and he was still putting in a decent number of hours every day getting his work done.

Was he working at peak efficiency? Of course not. He had puke on his shirt, he was running on two hours of sleep, and the babies were screaming. But he was still able to write the requirements that the company needed, which ensured that the development of new products didn’t come to a standstill.

This would make offering paid maternity leave a little more palatable because you’d, at the very least, be getting a decent percentage of their productivity. It wouldn’t ever be 100% because there are now babies around, but it would still be something. Offering this to employees, while still providing the mandated 12 weeks, might give employees a choice on what they want more. Many employees really don't want to leave work for that long, but feel they need to be home with their children. This solves all problems. 

What Should You Do If You Have Less Than 50 Employees

50 is the minimum threshold before federal legislation kicks in. We would suggest double checking whether your state has a lower threshold, but in all likelihood, you are not required to offer anything in that case. However, even still, I would recommend that you do for two reasons.

The first is that an employee really shouldn’t lose their job just because they decide to start a family. And the second reason, which ties in with the first, is that many women considering starting a family just won’t join a company that doesn’t offer it. If you're comfortable with that, you should know it will be twice as hard to hire the best candidates, since you're excluding half of the pool!

The reality is, if you are a smaller company and don’t offer maternity leave, you run a serious risk of alienating a significant group of people that would otherwise make your company far stronger. In 2013, the average age that a woman had her first baby was 26. Missing out on employees in this age bracket could have serious implications down the line when your older employees start to retire. These employees are also earlier in their careers, which makes it likely that it costs less to recruit them to your company.

As I’ve said with many other issues, such as dental and vision insurance, it is often times just the right thing to do. Employees should feel comfortable being at home with their children for those early months to ensure that everything is going fine.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.