Self-Employed and Pregnant? What Maternity Leave Looks Like for Freelancers in the U.S.

Yep, you read that title correctly. This isn’t a guest post and I, Bobby Hoyt aka Millennial Money Man, am actually talking about maternity leave.

From the very beginning of M$M, my goal has been to help millennials with their financial lives– debt payoff, investing, side hustling, retirement, etc. But, I haven’t spent much time talking specifically about marriage and families, and there are a lot of serious financial issues wrapped up those topics.

Millennials, though, are doing this whole marriage and family thing a little differently– our marriage rates are significantly lower than previous generations and the birth rate has dropped because of us. Still, some of us are getting married and having kids, hence a post for pregnant moms.

I know what you’re thinking…and no, I’m not about to be Millennial Money Dad. But, that is a great blog name that I might file away.

Here’s where this post is really coming from – When my assistant Mel told me that she was pregnant and we planned for her leave, I realized how relevant this specific subject was, especially as millennials are not only changing the way we start our families, but also changing the way that we work. Mel initially told me that she only needed a few days off.

Now, I don't know much about babies, but I do know that she deserved way more time than that. So…I told her to take as much time as she wanted.

Was it more work for me? Yeah. But, I was able to handle it, and I felt really good that my business allowed someone to take paid maternity leave for as long as they needed.

If you’re still thinking it’s weird that I’m talking about maternity leave, I get it. But here’s the thing – it’s more than my assistant that’s inspired this post. I regularly talk about self-employment, starting an online business, and the whole laptop lifestyle thing on this site…which means I need to address all of the issues that can potentially affect self-employed workers.

Here we go: self-employed and pregnant.

Before I really get into the whole maternity leave thing, I want to talk for a minute about being self-employed and/or side hustling

Like I said, I’m covering the topic of maternity leave because of how it suddenly became this thing I needed to know more about. And since I’ve been talking about side hustles for so long, it really shouldn’t have taken my assistant (a side hustler herself) getting pregnant for me to learn more.

Side hustles are freaking amazing.

They help diversify your income, meaning you can pay off debt, invest more, put more aside for retirement, etc. If your side hustle is doing really well, you might one day decide to leave your day job to pursue it even further. It takes a lot of work, but going full-time with your side hustle is a real thing that people do.

If you are side hustling, you are most likely a freelancer in some sense, i.e. self-employed, have multiple clients, and able to scale your business as you see fit. I’ve loved this part of my life, but there are some obvious drawbacks that you must prepare for, namely:

• Benefits- Specifically health insurance and paid time off. Freelancers are responsible for those two things, and while health insurance is getting easier to figure out with healthcare sharing ministries, that time of thing is something I still struggle with.
• Financial instability- Freelancing and self-employment can take many forms, but most of these workers would agree that there are good months and bad ones. This can make it difficult to prepare for major life events, like having a baby. This is why I talk about emergency funds so much.

Freelancing is becoming more and more of the norm in the U.S., and millennials are making up nearly half of that workforce. Upwork released a really great study about freelancing in America. Not only is it clean and easy to read, it just has a lot of really interesting facts about freelancing, such as:

• 57.3 million people in the U.S. freelance.
• 47% of millennials are freelancers.
• Freelancers contributed $1.4 trillion to the U.S. economy in 2017.
• More freelancers are perceiving their work positively than in previous years.

I feel pretty good about these numbers, except there was one that did kind of bother me, especially in terms of being self-employed and pregnant:

“The study found that, with the ebbs and flows of freelancing, full-time freelancers dip into savings more often (63 percent at least once per month versus 20 percent of full-time non-freelancers).”

I guess we could go the whole glass-half-full route and be super happy that these workers have a savings to dip into, and yeah…that’s great. However, I’m assuming that number isn’t just self-employed and pregnant women wanting some time off…so what do they do?

If that many self-employed workers are having to use their savings, how are self-employed women (or men) with families preparing for some type of new baby leave?

I’m going to get to that, but let’s first check in on maternity leave overall.

Maternity leave in the U.S.

Being that we have no mandated paid maternity leave, only 15% of U.S. workers receive any type of paid leave. And, it wasn’t until 1993 with the Family and Medical Leave Act (FMLA) that there was any type of job protection for women who wanted to take time off without pay. The caveat here – this isn’t for self-employed workers.

Side note: I know I keep saying “maternity leave” but most of the time I’m also talking about “family leave,” which generally means coverage for both female and male birth parents and/or adoptive parents. If I specifically mean “female only” leave, I’ll clarify that.

From the U.S. Department of Labor, “The FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave.”

While there isn’t federally mandated paid maternity leave, there are some states who have passed legislation for paid family leave as early as 2004. Full and part-time workers in New York, California, New Jersey, and Rhode Island have access to some type of paid family leave. These programs are funded by employee contributions. For example: New York’s program offers up to eight weeks of paid and protected leave and is funded by a 0.126% payroll tax. The payout is up to $652.96 per week, depending on your weekly wage.

Here’s a list of resources to find out information about each state’s family leave:

• New York
• California
• New Jersey
• Rhode Island

In 2020, Washington and the District of Columbia will join that list. For more information on each state’s policies, the Fairygodboss has some excellent information.

That page also goes over paid maternity and paternity leave for some large companies. Did you know that Netflix gives one full year of pay to both mothers and fathers? That’s pretty awesome.

But what if you’re self-employed and pregnant in the U.S.?

Unless you live in one of the states mentioned above, there is no one size fits all plan for you if you’re self-employed and pregnant and wanting maternity leave. The states listed above do offer plans you can buy into in the same way you buy into an insurance plan. There are eligibility requirements and the cost depends on your revenue. The links above all contain information for self-employed workers.

Now, if you’re saying, “I don’t live in one of those states” or “What are the other options?”, well…there are a couple of things.

• Having an emergency fund- I’m starting with this one because it’s probably what Coral and I would do if we were still traditionally employed and our employers didn’t offer paid leave. And even though we are making a great income while being self-employed, we’d still make sure to have an emergency fund specifically for this type of situation. It’s a pretty basic principle, you set money aside for emergencies, and the general rule is that 3-6 months worth of expenses should be set aside. If you are trying to have a baby or you know that one is coming, it’s probably a good idea to set even more aside.
• Short Term Disability Insurance– This is a type of insurance that will pay a percentage of your personal income if you are unable to work. Pregnancy is classified as a disability in these terms. Remember that you MUST buy into this before you are pregnant, otherwise they can and will deny any claims. For specific information, check out Growing Family Benefits to learn more about short-term disability insurance.

Hey Bobby, if I’m self-employed, maternity leave is more than just money!

Yes! Let’s talk about that.

When you work for yourself, a part-time side hustle or full-time business, your business will still need to run while you are having that baby and for whatever time you want to take off afterward.

I’ll be honest, I struggle to take two weeks off to go on vacation. I have no idea how I would manage if I was also recovering from something like childbirth and learning to care for a HUMAN BABY. You ladies are freaking amazing.

This is definitely one of those situations where there are just too many variables in place. When’s the baby coming? Is labor and delivery going to go smoothly? What about the health of baby and mom? How do you even plan for this?

When you’re self-employed and pregnant, a lot of your planning will depend on the type of business you run. You could front load your projects, hire some help, automate what you can, not take any new clients, etc. For those who work online, it might be a little easier (maybe?), but you still need time off.

You’re a man, what are women actually doing?

Being a man, I can only understand this so much, so I’m going to go ahead and defer to articles written by real women who have actual experience with being self-employed and pregnant and planning for maternity leave:

How to Take Maternity Leave When You’re a Freelancer

How to Manage a Short Maternity Leave If You’re Self-Employed

How Entrepreneurs Take Maternity Leave

How Freelancer Can Plan For Parental Leave

Googling “self-employed and pregnant”

To research this post, I naturally entered that term into Google, and I was really surprised by the results. A significant number of the results led me to sites written for countries other than the US, namely the UK and Canada, both of which provide paid maternity options for self-employed women.

I’m not going to spend too much time on this, but basically, both countries offer some type of maternity leave option for self-employed workers. Maternity leave in the UK is government funded.  It requires that you have sufficiently paid into National Insurance, which is kind of like the British equivalent of Social Security. In Canada it’s a separate employment insurance you must be paying into prior to getting pregnant.

You can find out more details here:

• Canada: Mat leave survival: How do you plan a parental leave when you’re self-employed?
• UK: A guide to maternity leave for freelancers and the self-employed

Maternity leave worldwide

If Canada and the UK have their families covered with some type of family leave, what about the rest of the world?

The United States is one of a very small number of countries without paid maternity leave. We’re actually the only developed nation without it.

Friendly reminder, this can be a political topic, but this isn’t a political site, k thanx.

Here’s a short list of what other developed nations offer in terms of paid maternity leave:

• UK- 39 weeks
• Germany- 14 weeks
• France- 16 weeks
• Japan- 14 weeks
• Israel- 14 weeks
• Mexico- 12 weeks
• Brazil- 120 days
• Canada- 17 weeks

Want a really detailed report about paid and unpaid maternal, paternal, and family leave? Find it here.

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January 2, 2019Posted in: Inspiration