Small Business Maternity Leave Policy & Laws – With Examples

Under the Family & Medical Leave Act (FMLA), employers with 50 or more employees must provide new and adoptive moms up to 12 weeks to care for themselves and their infant. Although required only as unpaid leave, ensuring mom has a job when she returns, some employers choose to provide a maternity leave policy that provides paid leave.

Specific and sometimes more restrictive laws vary by state. This article will cover maternity leave laws and provide you two free maternity leave policy templates, one for an unpaid maternity leave policy and another for a paid maternity leave policy.

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Please note that this article provides general information only. We recommend that your attorney reviews any new maternity leave policy before you share it with employees.

When a Maternity Leave Policy Is Required

There are two main factors that affect whether you are required to provide maternity leave:

1. The size of your company
2. Your business’ location

Maternity Leave Policy Required For Companies With > 50 Employees

If your business has 50 or more employees, you are required to comply with the federal Family and Medical Leave Act (FMLA), which is one of the federal labor laws. FMLA requires businesses to provide up to 12 weeks of unpaid maternity leave. If you employ fewer than 50 employees, there is no federal law requiring you to provide maternity leave.

Pregnancy Discrimination Act Affects Companies With > 15 Employees

Even if maternity leave is not required because of your small company size (under 50), if your company has 15 or more employees, you must abide by the federal Pregnancy Discrimination Act which prohibits discrimination based on pregnancy, childbirth and related medical conditions. In other words, you can’t treat people differently just because they are pregnant.

For instance, if you allow other disabled employees to work from home, you must offer the option to your pregnant employee to work from home as well.

Some States Have Additional Parental Leave Requirements

While there is no federal law requiring parental leave for businesses with fewer than 50 employees, your state may have additional laws that you are obligated to comply with.

And it also depends on what you’ve done in the past. For example, if you have only 20 employees, and one wants to take maternity leave, you have no obligation to pay her medical benefits or guarantee her job when she comes back, unless your company leave policy states otherwise. If your policy states you provide maternity leave, or if you allowed another mom work flexibility, such as allowing her to work from home, then you must abide by that precedent.

States that require companies with fewer than 50 employees to provide maternity leave include California, Colorado, Connecticut, Hawaii, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, New York, Oregon, Rhode Island, Tennessee, Vermont, and Washington.

See our State Maternity Leave Laws table below for more information if your business is one of these states.

Paid Maternity Leave is Not Required

There is no federal or state law that requires any company (regardless of size) to pay for parental leave. However, there are four states with publicly-funded paid maternity leave available in their temporary disability program. If your business is located in California, Massachusetts, New Jersey, Rhode Island or New York (as of 1/2018) you pay for this through your payroll taxes.

Though not required by any law, providing paid maternity leave can be a great way to differentiate your company from competitors and help retain your best talent. In fact, employee perks like paternity leave are one of the 5 top workplace trends. When you consider how much it costs to recruit and train a new employee, a paid maternity policy can actually make sense for your business.

What Other Businesses Do to Manage Maternity Leave

According to the Society for Human Resource Management (SHRM), “From 2005 to 2016, the percentage of organizations offering some replacement pay for women on maternity leave increased from 46 percent to 58 percent.” However, only 6% provide payment of the employee’s full salary during that time. SHRM’s National Study of Employers found that small businesses (those under 99 employees), instead of providing paid leave, tended to be more flexible with employees, allowing options such as part-time return to work, flex time, and work from home arrangements.

Keep in mind that having a maternity leave policy can differentiate your small business within your industry or your community. It also leads to a positive company brand image and helps retain good employees. Research shows most Americans wish companies did more to support employees having a family. A large majority of Americans think fathers should also get paid paternity leave.

Paid & Unpaid Maternity Policy Templates

1. Paid Maternity Leave Policy Template

• Download this template as a PDF
• Open this template in MS Word/Google Docs

ABC Company provides maternity leave for adoptive and natural mothers as a benefit of employment here. To be eligible for these benefits:

• You must have worked full time for ABC Company for a minimum of 12 continuous months.
• You are in good employment standing with ABC Company (i.e. not on probation).
• We ask that you request leave a minimum 30 days in advance if possible. If this is not possible, please place your request ASAP once you become aware of it.

The benefits are as follows:

• 40% of your salary for the first 4 weeks of leave. (Another great option would be to include adding on extra benefits for tenure such as 40% for 12 months-36 months; 60% for 36 months-60 months; 80% for 60 months+)
• You may use available/accrued PTO & sick leave time, which are paid 100% of your salary amount.
• You may request up to 4-8 weeks of additional unpaid leave.
• Total maternity leave time should not exceed 16 weeks.
• We will continue to cover your health insurance premiums during your maternity leave given that you do return to work for ABC Company as previously agreed upon.

Prior to the start of your maternity leave, the employee and ABC Company will create a return to work plan that also includes the leave time. The employee is expected to communicate with ABC Company if the leave plan or return to work plan needs to change while on leave.

2. Unpaid Maternity Leave Policy Template

• Download this template as a PDF
• Open this template in MS Word/Google Docs

ABC Company provides maternity leave for adoptive and natural mothers as a benefit of employment here. To be eligible for these benefits:

• You must have worked full time for ABC Company for a minimum of 12 continuous months.
• You are in good employment standing with ABC Company (i.e. not on probation).
• We ask that you request leave a minimum 30 days in advance if possible. If this is not possible, please place your request ASAP once you become aware of it.

The benefits are as follows:

• Up to 12 weeks of unpaid leave. (12 weeks is the same as FMLA; however, a range from 4-16 weeks is acceptable.)
• You may enroll in our short term disability policy that is provided and is at your (the employee’s) expense.
• You may use available/accrued PTO & sick leave time, which are paid 100% of your salary amount.
• Total maternity leave time should not exceed 16 weeks.
• We will continue to cover your health insurance premiums during your leave time given that you do return to work for ABC Company. (This is an added benefit that has true value during unpaid leave.)

Prior to the start of your maternity leave, the employee and ABC Company will create a return to work plan that also includes the leave time. The employee is expected to communicate with ABC Company if the leave plan or return to work plan needs to change while on leave.

3 Phases of Maternity That Businesses Need to Know

There are actually three phases of maternity that require your attention. They are:

1. The phase when an employee works while pregnant
2. The timeframe when she leaves work to prepare for, deliver, and care for her baby
3. The phase when the new mother returns to work after the birth of her child

Let’s go into detail on what is required during these 3 phases. We will also answer some common business maternity-related questions in our FAQs.

Phase 1: Employee Working While Pregnant

Source: WorkingMother.com

The law that applies when you have an employee who is pregnant is Title VII of the Civil Rights Act of 1964, which includes the Pregnancy Discrimination Act (PDA). It applies to employers with 15 or more employees, but we recommend all employers follow the guidelines as a best practice.

The PDA prohibits discrimination against employees and applicants on the basis of “pregnancy, childbirth and related medical conditions.”

Pregnancy Discrimination Example

If you previously provided leave for an employee with a temporary disability like a broken arm or cancer, you’ll need to offer the same sort of time off and/or flexibility to your pregnant employee.

Pregnancy Complications

While an employee is pregnant she is further protected by the Americans with Disabilities Act (ADA), required for any employer with 15 or more employees. The ADA stipulates that reasonable accommodations must be made for the employee to do her job successfully, similar to any other employee with a disability or special need.

Assuming the employee has told you of her pregnancy, we recommend checking in with her at least once per month to see if she needs any accommodations. Make a record of each meeting, and document requests and any actions taken. For example, the employer may need to offer light duty, alternative assignments, disability leave, or unpaid leave to pregnant employees if you have done so for other temporarily disabled employees.

Pregnancy Accommodation Examples

Here are examples of reasonable accommodations from the “real world”:

• Providing a lumbar support pillow if the expectant mother is having back pain
• Offering a chair for her to sit in at a trade show so she doesn’t have to stand for hours
• Reimbursing her for a taxi to a business meeting that’s over a mile’s walk away
• Allowing her extended breaks for morning sickness or restroom use if she requests

Phase 2: Employee on Maternity Leave

Source: Working at Home Mom wahm.com

As a private employer with 50 or more full-time employees, you need to comply with the Family and Medical Leave Act (FMLA). The FMLA requires businesses to allow new mothers to take unpaid maternity leave (up to 12 weeks) while guaranteeing that she will have a job when she returns, either in the same position, or one similar.

The employer is also required to continue her group health insurance coverage and cannot penalize the time away from work as an ‘absence’. However, if you employ fewer than 50 full-time employees, under federal law, you have no obligation to provide maternity leave.

State Laws on Maternity Leave

State laws can be stricter than federal law, so we suggest you review what’s different in your state in the State Maternity Leave Laws table below. For example, both California and Oregon are examples of states with paid sick leave laws that can be applied during maternity leave. Please note that you’ll need to comply with whichever of the Federal or State laws is more strict. And even if your state doesn’t require a policy, creating a maternity leave policy is a sound business practice ensuring you retain good employees and prevent potential litigation.

Five states have publicly funded paid maternity leave — California, New Jersey, Massachusetts, Rhode Island and New York (as of 1/2018). All other leave referred to in the below table refers to unpaid leave, similar to a leave of absence.

State Maternity Leave Laws

Phase 3: Employee Pumping Milk After Return to Work

Source: www.breastfeeding-magazine.com

A breastfeeding mother who returns to work has a right to “pump” in the workplace under a provision of the Fair Labor Standards Act (FLSA), which covers work regulations like minimum wage, breaks, and record-keeping. “Pump” is a legal term describing a nursing mother’s right to express milk. As the employer, you are required to provide her adequate break time and a clean, private place to pump.

Here are some acceptable and non-acceptable examples of a location for the new mom to pump.

Compliance with this law is required for all employers regardless of size. However, if you have fewer than 50 employees and can prove an accommodation provides an undue hardship on your business, you may be exempt. An undue hardship is defined as, for example, needing to do construction on your employment site to provide a private room for pumping. You can find more information about complying with the law from the US Breastfeeding Committee.

5 Maternity Leave Policy Options

Here are 5 options for customizing a maternity leave policy for your company. We recommend a combination of these options to support your business and truly care for your employees in a fair and inexpensive way while creating a great company culture.

1. Provide Unpaid Maternity Leave

Consider offering a set amount of unpaid leave such as a minimum of 4 weeks and a maximum of 12 weeks (12 weeks is what FMLA allows). Or leave that range up to the employee and simply state that the employee can take “up to 16 weeks”, which is the maximum generally offered by small businesses.

2. Offer Remote / Work from Home Options

Allow new moms to work from home once they feel well enough to do so. Stay in touch with the new mom as her desire to work from home may change once the baby arrives. In addition, you may need to provide her with work from home tools such as a cell phone, internet and computer.

3. Allow Flexible Scheduling

Provide a flexible work environment and flexible schedule, such as part-time, or fewer, longer days that add up to her regular hours. Or consider allowing the new mom to come in as she is able once recovered from the delivery. (Some businesses let new moms bring infants under 6-months old into the office.) And similar to allowing a mom to work from home, regular communication is key since her needs may change based on hers or the baby’s health, nursing and sleep habits.

4. Offer Short Term Disability Insurance

Offer short-term disability insurance at the employee’s expense with your benefits package. This can be a great perk for employees who value family and is at no cost to you as the employer. You may want to review our guide on offering Disability insurance.

5. Offer Paid Maternity Leave

You can offer paid maternity leave, which is becoming more popular, although not yet as common in the US as in other countries. Some ideas for reasonably-priced paid maternity leave include:

• A graduated plan based on tenure (i.e. 40% for 1-3 years, 50% for 3-5 years, 60% for 5+ years). The cost to train a replacement employee pays for itself at this rate!
• A flat 1-4 weeks paid option.
• A short-term disability supplement, if you offer short term disability insurance, such as 30% pay for up to 12 weeks.

Administering Your Maternity Policy

After developing and providing employees with a copy of your policy, consider having every employee sign and date the policy, update your employee handbook and document their acknowledgement in their personnel files (electronic or paper is fine) like any other policy, such as sexual harassment.

If you use an employee benefits provider like Gusto, it’s even easier to put your company policies into your employee handbook and have employees electronically sign any necessary documents. Check out our webinar to learn more about how Gusto can help you keep track of compliance as well as payroll and benefits.

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Maternity Policy FAQs for Small Business Owners

Disclaimer: We spend hours researching and writing our articles and strive to provide accurate, up-to-date content. However, our research is meant to aid your own, and we are not acting as licensed professionals. We recommend that you consult with your own lawyer, accountant, or other licensed professional for relevant business decisions. Click here to read our full disclaimer.

My employee just told me she is pregnant (or adopting a child) and I don’t have a policy yet.

This is a unique situation and the following steps should help you to resolve it:

1. Have you had a pregnant employee in the past when you were a smaller business? What did you do? You should do the same for your current pregnant employee in order not to discriminate (assuming you didn’t do something inappropriate like terminate her.)
2. Have you ever had a disabled/injured employee in the past? What did you do for that employee? You should offer similar benefits to your pregnant employee.
3. If you have not had this situation before, work with the employee to find a win-win situation. What is she hoping for? Once you establish a plan with her, consider creating a maternity policy around this standard. Perhaps she can be your best advocate.

I heard through the grapevine that my employee is pregnant.

Like any undisclosed medical condition, you may not ask her about it nor take action of any kind. Legally, a pregnant woman does not have to disclose her pregnancy to her employer. You also cannot force an employee to take maternity leave if she does not want to.

My new hire started a month ago and just told me she is pregnant.

Your new employee is just as protected by the federal anti-discrimination legislation as the employee who has been with you for 10 years. Even though your employee is new, she should be treated equal to other employees. However, she is not eligible for FMLA leave until she has been employed by you for one year unless your business is located in one of the states with unique requirements shown in the chart above. Finally, this is when having a set maternity policy in your employee handbook can benefit you; you can review your maternity leave policy and plan on a successful work environment that accommodates her needs, as is legally sound.

An employee I was just about to fire informed me she is pregnant.

Unfortunately, this is a tricky situation. If you need to terminate the employee, you will want to have thorough documentation of any performance issues, so you can defend yourself in a potential lawsuit, if she claims wrongful termination. However, we recommend you consult your attorney. A better option would be to provide coaching and training on her work performance, and continue to document performance issues. Then, if those issues continue after her maternity leave is over, consider waiting (a minimum of 6-12 months) after your employee has returned to work before considering letting her go. Always document performance review meetings, coaching sessions, training, and discuss with your attorney prior to taking action.

My second in command, crucial to the business, wants maternity leave.

You can reject a pregnant employee’s claim for FMLA if the employee is crucial to the business. But should you? Given the litigious nature of the issue, we recommend you work with her to create a plan that suits both the business and her needs. Is she willing to work part time, remotely, or consider a flexible schedule? Can she help you to recruit for a temporary replacement? Are you willing to allow her to bring her infant to work for a few months? There are many options you can both consider.

Although as a small business, you could deny her maternity leave, consider how she will feel and how your other employees will perceive your action. Is losing her as a business partner worth the fight? Are you willing do damage your employer brand? Have you no other options to cover her workload so that she can have quality time for her health and her new baby?

My pregnant employee is currently on maternity leave. I need to hire a replacement for her and terminate her while she’s on leave. Is this okay?

It depends. If you employ fewer than 50 people, you have no obligation to guarantee your pregnant employee that she will have her job when she returns to work. However, if you have a policy which states that you provide maternity leave, or if you allow other disabled people to take an extended leave of absence, then you must abide by your policy and precedent.

Bottom Line on Maternity Leave Policy

Having a maternity leave policy isn’t necessarily required, it’s just a smart business practice that helps you retain great employees and avoid lawsuits. Remember that your company’s location and size are the two most important factors determining what you need to do as an employer.

The important numbers are as follows:

• If you have 50+ employees, you need to abide by FMLA
• If you have 15+ employees, then you need to comply with PDA
• All employers must comply with FLSA, by treating working mothers fairly

And don’t forget to check our State Maternity Leave Laws table to see whether your state has additional maternity leave, pregnancy or nursing mother requirements.

These days, many states have reframed maternity leave laws as parental leave, which includes paternity leave for fathers. Learn more about paternity leave in our related article Paternity Leave Policies.