Maternity Leave and Not Losing Money

Maternity leave in the US is a joke, especially compared to the rest of the world. But, that joke is my reality for the next year, so I have to figure out the best way to deal with it–especially since I’m the primary breadwinner in my household (well, sort of – we split everything 50/50 but should shit hit the fan it’s my savings that will ensure we’re not living on the street.) Anyway…

My income is just worth a lot. If my husband made a substantial salary and I was, say, a teacher or social worker (no offense to teachers or social workers) it would be less impactful to our household income for me to take a few months off. However, when I look at the cost of my time off, it’s really expensive.

I’m SO lucky to live in California, where there’s at least some paid leave required. And by paid, I mean, at a partial amount, but at least it’s something. To be clear, I’m torn on whether I think maternity leave should be paid because having a kid is a choice–a luxury–and I don’t really think people who are childless should have to pay for my choice to have a kid. If I’m unable to work for a certain period of time, I also don’t think my company should have to pay for me when they are getting no value out of my contributions (since, well, I’m not contributing anything.) I would be nice if my company wanted to provide pay for time off to be with my kid, but I don’t actually fault them for their policies. I think they’re fair. That doesn’t mean I can’t be jealous of people who live in Canada or other parts of the world who get a year off to spend with their baby at partial pay. But it is what it is…

That’s why I’m trying to figure out what’s right for my family and me without throwing off my networth/savings goals for the year. Legally, I’m only entitled so a certain amount of time anyway, so it shouldn’t hurt that much, unless I opt for the final 6 weeks that are entirely unpaid. More on that in a minute.

To start, in California, I’m eligible for 4 weeks prior to due date (and leading up until birth) and 6 weeks after birth of protected leave with partial pay. That’s covered by disability payments at 60% of my salary (well, not really 60% of my salary since there is a cap) but it’s not taxed so the total income will be less than my salary but not completely horrible (I think.) Then, I have a short term disability plan through work which possibly makes up for some of the gap, but I haven’t spoken with them and am not sure exactly how this works or if I can use it prior to birth or only after (a lot of the plans only kick in after birth.) Meanwhile, my company provides 4 weeks fully paid to start whenever you take your leave…

Choice #1 is –when do I go on leave? I can go on leave four weeks before my due date. Those four weeks are “use it or lose it” so unfortunately one cannot tack them on to “after birth” to spend more time with child. At the moment, I’m leaning towards taking 2 weeks prior to my due date off. Part of me is also considering working up until my due date (the hospital is closer to my job, so if I go into labor at work, I’ll just hop in an uber and meet my husband there)… sort of serious on this. By working close to or up until my due date, I show my company I’m serious about work, and I’m not out of the office that long so it will feel more like I’ve been on an extended vacation (to them) than “maternity leave.” I know my new boss has plans to grow the team and if I’m not there, it’s going to be easier to–not replace me–but augment me in a way that I no longer have room for growth.

Financially speaking, whenever I go on maternity leave, there is one week unpaid (a “waiting period”) which is lame but that’s how disability pay works. I’m still confused how the four weeks paid fully by my company work in tandem with that — since disability pay will not provide any income while your company is covering your leave — but I don’t know if one of the four weeks of pay can cover the one week that isn’t paid from the state, or if you still need to take a week unpaid once those benefits run out.

I’m also completely confused about (and HR wouldn’t give me a straight answer) regarding my bonus, stock purchase plan, and vesting of my stock while on leave. Well, the stock purchase plan ceases to contribute funds while you’re on leave, since there’s no funds to contribute. That makes sense, and is one area where I’m losing money outside of core salary when I’m on leave. I was sort of told that my stock vesting would continue, but there’s no hard-and-fast rule on this, so my guess is I’ll just have to see if I lose out on a chunk of my stock vesting for the year. I think they can’t take away the shares I’m granted–only push out the vesting longer. I’m hopeful that in December at least a prorated chunk of them vest, because that’s so significant if I knew they wouldn’t I’d probably decide to not take any maternity leave. Then there’s my bonus, which, though I haven’t had this confirmed, is likely prorated based on the days I’ve worked through the year. My full bonus pre-tax is worth about $30k, so 3 months out of the office would be a loss of $8250 pre tax (not that a bonus is guaranteed or that I’d get my full bonus – but if I do get my full bonus, then 3 months out cost an additional $8k pre tax, which is not pocket change.)

This confusion and likely loss of other income leads me to want to take the least amount of maternity leave possible without being a complete idiot about it.

Choice #2 when to take “paid family leave”

I don’t actually have a choice when I return to work. Due to not being at my job for a full year when I give birth, I have to return to work once my doctor releases me from disability, which is likely six weeks after baby arrives. In those six weeks I’m covered by state disability pay and short term disability. My take home should be maybe close to what I make (I really don’t understand how it adds up and no one has an answer, so I’m just trying to set aside some savings for those weeks and hoping it isn’t that bad.) I’ll lose out on my bonus over that time and my stock purchase plan contributions–so taking that time off, which I really have to take off (my work says they won’t let me back until doctor signs a note saying I’m no longer disabled), will cost me about $10,000 pre tax. I’ll run the numbers after the fact. The biggest loss will be my prorated bonus.

After disability, however, I have the option to take more leave once I hit my “year” this fall. In California, you are able to take 12 weeks protected leave for bonding with your child over the first year of your child’s life. Those 12 weeks include 6 partially paid (unfortunately these are paid at $1250 a week max and that gets taxed) and six weeks unpaid. So — though it’s very nice to have the job protection during that time (side note: it feels like it won’t really be protected if I don’t take it all at once up front and my company can fire me knowing I’m planning to go on leave at any point), that time off is going to start to get very expensive. Every week off during the partially paid period will probably cost me around $3000 a week pre tax (again, based on super loose estimates) including salary loss, bonus loss, and stock loss. Once it goes to the unpaid leave, then it’s much more expensive than that.

Yes, my kid will only be young once — but I’m in the boat that I feel like I’ll only have the ability to earn this much once — if I can save a lot now, I can have freedom later to spend with my child/children down the road. I’d rather work now and have that time later (I think.)

So, I can opt to not take any family bonding time or, I can take some of it (I’ll probably end up taking the six weeks semi paid in 2019, so the impact is spread out a bit more and also my bonus risk is reduced since I have to survive another full year before seeing my 2019 bonus anyway, so that’s not a sure thing regardless.)

My fear is that if my company knows I’m planning to use 6-12 weeks of leave in 2019, they have every reason to fire me when my job is not protected. I don’t think I have any legal rights at that point either–since your company can’t fire you without really good cause when you’re pregnant… but your shit out of luck if they let you go in between disability leave and paid family leave. I’m not saying my company would do this, especially if I’m kicking ass at work– but they have ever right to. I don’t feel like the “job protection” during the time off is all that valuable if they know you’re going to take three months off in the year coming up… maybe, they should just replace you first?

That said, I’m still planning on taking the six weeks of paid family leave stretched out in the first half of 2019. I’d like for my baby to be able to bond with its grandparents on the east coast, so I may use some of that time to take baby to visit them. It will be super costly losing my income and bonus, etc, but I’m trying to arrange this were the impact is as minimal as possible. Ie, maybe I’ll take 2 weeks in January, 2 in March and 2 in May or something. Then, I can make the call whether to take the last six unpaid in June/July. I don’t know if I’ll be able to bring myself to take any unpaid leave, but maybe another two weeks in July before my baby turns one.

Choice #3: The Least Amount of Leave

I wish I understood how all of this works (and HR had clearer policies) so I could run the numbers and understand exactly how much maternity leave will cost. But, I could take the risk-averse approach and take the minimal amount of leave… which basically would =

  1. work up until my due date (my due date is on a Saturday so if I happen to give birth on time–which isn’t a thing that happens–this would work perfectly)
  2. return to work after 6 weeks of birth (I have to do this anyway) OR request to be certified by my doctor to return early. I doubt I’ll want to do this, but it would be the most fiscally wise move… return to work at 4 weeks post birth (which some women have to do… some go back after a week or two in the US if they have no job protection!) Maybe I’ll feel fine, baby will be in good hands with dad, and I’ll want to return to work sooner to minimize the financial impact of my leave.
  3. don’t take any paid family leave or unpaid family leave time off. Avoid losing my bonus and stock vesting by opting to not take any additional time off. No one requires you take this time and it certainly won’t help my net worth goals. Or, take some of it but not the full 6/12 weeks.

I’m Not Actually Sure What I’ll Do…

What I told work is that I plan to work until I feel I no longer can (my plan to self is prob 2 weeks before my due date) and then to go out for six weeks post birth. Then, I’m going to try to use vacation time (if I’m allowed to) in order to take 2 weeks off around thanksgiving. I can then figure out what to do with my paid family leave in 2019, and will set it up in a way that is least disruptive to work.

This all sounds good now, but I have no idea how I’ll feel or be after having my kid. I’m so grateful that my husband works from home and can stay home with baby (his dad is planning to come over during the day to help out) and we’ll see how it goes.

I’d very much like my leave to not disrupt my goal of $1M in networth by 2021/22 and being able to be more flexible when (if) I have kid #2 in a few years.

Still, it’s a bit frustrating that I can’t understand what this is all going to cost me until after the fact–with some of those up-in-the-air questions substantially impacting this goal. Oh well. I’m excited baby is on the way. I want to be able to see my child and also am concerned about exhaustion and so many things. It will be fine, but I’m definitely leaning towards trying to not take any extra time until 2019, since that bonus is significant and I want to earn my full bonus this year if possible – so every week off is quite costly.

 

 

 

 

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3 comments

    1. Joy ( User Karma: 0 ) says:

      There is one woman on my team who I’d like to ask – but she also has been with the organization a lot longer. I bet I can get some answers from her though. I’m shy, so it’s challenging for me to ask people these things!

  1. Steveark says:

    That is such a well thought out analysis. I can’t imagine any company not fighting like crazy to keep such a clear thinker onboard! I especially liked the evenhanded way you looked at what the company’s real responsibilities should be. Not a shred of entitlement in that part. You definitely have thought it through and you’ll make the best choice for you. You sound like a great team member at work and like you’ll be a great mom as well. Our home situation was reversed with me being the high earner and my wife being the not very highly paid teacher which made the decision easier from a financial standpoint. Just love the fact that you are nobody’s victim, that’s uncommonly inspirational!

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