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What to Do When a Company's Maternity Leave Pay Is Insufficient?

The Family and Medical Leave Act protects the jobs of nearly 90 million employees in the U.S., including woman taking maternity leave to care for a newborn child. What FMLA doesn't do, however, is require the company to provide any sort of compensation during that time. If the wages offered by your company during maternity leave are insufficient -- provided there's any payment at all -- new parents need to plan for the shortfall before the baby arrives.

RELATED: Maternity Leave: The Basics

Pre-emptive Planning

Once you're comfortable informing your employer about your pregnancy, don't wait until you're about to go into labor to determine your financial strategy. Talk to your employer about what the company offers, whether it's full payment, partial wages, the use of vacation and sick time or nothing at all. Stephanie Anderson, marketing communication strategist for job search engine LinkUp, suggests asking if your employer will grant extra vacation time of whether you can "go into the hole on your paid time off."

Potential Insurance Coverage

In lieu of a paycheck, your company might pay the premium for short-term disability insurance, which offers all or a portion of your paycheck for a predetermined time on maternity leave. You might have a waiting period or be required to use up your vacation and sick time before the disability payments kick in. If this insurance isn't available to your through your employer, consider purchasing it yourself. "You will have to weigh the cost of insurance and abide by any waiting period they have for pregnancy, but you might find it a good supplement income source," Anderson says. The kicker: You likely have to purchase this insurance coverage before becoming pregnant.

Creating a Budget

The most effective way to close the gap between anticipated income and your needs is to create a budget at home and begin setting money aside early. "You'd be surprised at how much you can save in 10 months," Anderson says. Add up your monthly bills and multiply your total by the number of months you plan to be on leave. Divide that number by how many months you have left before the baby arrives and aim to put away that much each month. For example, if you need $2,000 a month to pay your regular bills and will be off work for three months, you need $6,000 saved -- minus any income that your partner brings in, if applicable. If you have seven months until the baby is born, aim to save around $860 a month to get through maternity leave. Although you will save on some expenses, such as gas for your commute, while on leave, you'll pick up other expenses, too, such as diapers. Cut back on going out to dinner and shopping for business clothing and consider cutting luxury expenses, such as video streaming services or cable TV. Try living on a reduced income before the baby arrives to see if it's feasible for your lifestyle.

RELATED: What Does Maternity Leave Mean, Anyway?

Going Back to Work

When all else fails, you might head back to work earlier than expected or on a part-time basis, Anderson says. "It's a last resort, but you've got to put food on the table and in the bottle, right?" Another option is to pick up freelance work, though it's not possible for all new moms. "Freelancing can often be done from home during irregular hours," says Hank Boyer, president and CEO of Boyer Management Group. "Often employers need help with work, projects and research that's familiar to someone who has been active in the workplace, but they want/need less than full-time staff for the duties." Before taking on this task, check with your full-time employer to make sure there's no policy against freelance work.

Photo via Cathy Yeulet/Hemera/Getty Images

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