How Freelancing Parents Can Create Maternity or Paternity Leave

Published May 21, 2019 in The New York Times

THE GIST

• The Family and Medical Leave Act doesn’t cover freelancers, but certain states offer their own paid leave programs. Explore these programs early.
• Many freelancers pay for parental leave by stashing savings, but how much you’ll need will depend on your current monthly expenditures, location and lifestyle.
• Freelancing mothers who are thinking about getting pregnant may also find some financial support through a short-term disability insurance policy.
• Having a strategy for transitioning into leave and managing clientele while away can help ensure that freelancers can return to their jobs after leave with minimal disruption.
• Laws that prevent employers from discriminating against pregnant employees are often hard to enforce or don’t apply to freelancers; having a clear strategy can help.

Parental leave can be tough to access, even within organizations that offer generous paid leave policies. For full-time freelancers and independent contractors, it’s even tougher to carve out time off when a new baby arrives.

The Bureau of Labor Statistics estimates that there are 10.6 million independent contractors working in the United States. An additional 5.9 million adults work in temporary “contingent jobs.” While freelancers, independent contractors and those living off the so-called gig economy often have more job flexibility than traditional full-time employees, they also have a less reliable cash flow and fewer protections.

For this guide, I spoke with five experts about strategies full-time independent contractors can use to tackle the legal, sociological and economic obstacles they’ll face as new parents, and I also spoke to parents who are freelancers and have faced that struggle.

WHAT TO DO

Investigate state-supported paid leave

The federal Family and Medical Leave Act, which provides up to 12 weeks of job-protected unpaid leave for employees in larger companies, doesn’t apply to independent contractors, but a few states, including New York and California, offer their own benefits.

New York’s paid family leave policy offers job-protected paid time off for both traditional employees and independent contractors who are welcoming a new child (including adopted and foster children), caring for a sick or disabled relative or providing help when a family member is deployed abroad on active military duty. For 2019, self-employed individuals, which includes independent contractors and sole proprietors, are eligible for 10 weeks of paid leave—taken either all at once or in one-day increments—at 55 percent of their average weekly income. In 2020, compensation is slated to rise to 60 percent and by 2021, the state will offer 12 weeks of paid leave at 67 percent.

California offers a similar benefit, with freelancers eligible for six weeks of job-protected leave at 60 to 70 percent of their average weekly salary. Massachusetts, Washington State, and Washington, D.C., have all passed paid leave legislation that will open up to self-employed freelancers within the next few years.

For freelancers, there’s a catch: These state-sponsored programs often are poorly publicized, tough to access and come with special requirements for the self-employed, said Sherry Leiwant, co-president of A Better Balance, a legal advocacy nonprofit specializing in paid leave and workplace discrimination issues.

New York independent contractors, for example, must purchase a paid family leave and disability policy through the state within the first 26 weeks of starting their business. Those who purchase the policy after that 26-week window will need to pay in for two years before accessing benefits. Other states have shorter waiting periods or none at all, but require freelancers to pay into their plans for a certain period of time.

Leiwant advises freelancers living in states that offer paid leave to investigate their options early, preferably as soon as they start their business, and to read the fine print before enrolling. Freelancers in states that require lengthy pay-in periods may not be able to access benefits if a new baby arrives before the pay-in period is up.

Make a financial plan

Unfortunately, most full-time freelancing parents aren’t eligible for paid leave, meaning that they’ll need significant cash reserves to step away from work, said Joseph Goetz, Ph.D., an associate professor of financial planning at the University of Georgia College of Family and Consumer Sciences. Many family finance experts recommend having at least three to six months’ worth of expenses stashed away. Freelancing parents taking leave will also need, at a minimum, reserves to cover time away from work as well as additional expenses that come with a baby, such as health care, child care and newborn necessities, Goetz said. Some may also need extra cash to pay subcontractors who can cover their workload during the leave.

The U.S. Department of Agriculture’s Center for Nutrition Policy and Promotion estimates that the average middle-income family will spend between $12,000 and $13,000 on a child during its first year of life — but these costs vary tremendously according to a family’s individual needs, lifestyle and geographic location. To figure out how much parental leave they can afford, Goetz recommends that families evaluate their monthly expenditures, estimate how much they’ll spend on additional baby expenses, “then add a premium on top of that, add 10 percent or 20 percent.” New parents can also sidestep unexpected health care costs by contacting their insurance providers to figure out what pregnancy and birth costs are covered.

Stockpiling substantial cash reserves isn’t feasible for many independent contractors, said Liz Morris, deputy director for the Center for WorkLife Law at the University of California, Hastings College of the Law. One survey by Upwork and Freelancers Union found that even without babies on the horizon, 63 percent of full-time freelancers dip into their savings at least once per month, compared to 29 percent of full-time traditional employees.

Short-term disability insurance may alleviate some financial pressure for freelancing moms, Morris said, but these policies should be closely evaluated to ensure that the benefits are worth the costs.

These policies often provide mothers giving birth, either vaginally or by C-section, with several weeks’ worth of a portion of their average income, as well as with coverage for complications that may arise during pregnancy or after giving birth.

“Sometimes you have to buy that disability insurance a long time before you get pregnant, like a year in advance,” Morris said. A freelancing mom who is already pregnant probably won’t qualify for income replacement under short-term disability insurance.

Craft a transition strategy

Even freelancers who don’t have the perfect financial plan in place can start creating a strategy for transitioning into leave and ensuring that their work is covered while they’re gone. Independent contractors who plan to bring in help during their leave can evaluate what portions of their job can be outsourced, and network with fellow freelancers in their industry, Morris said.

Freelancing parents will also need to create a timeline for finishing important projects before they take leave, a plan for getting hired help up to speed and a strategy for walking clients through the transition, said Caitlin Pearce, executive director of Freelancers Union.

“Communicate that that plan may be subject to change, but that you are planning to come back to work if that’s the case and that this is how you expect to navigate your leave,” she said. If things do change, Pearce recommends communicating quickly and staying in touch with clients during the leave.

Reassuring clients that there’s a plan for navigating leave and that you will be returning to work can be especially important for freelancing mothers, said Pamela Stone, Ph.D., a professor of sociology at Hunter College who studies gender equality in the workplace.

A wealth of research shows a bias against moms in nearly every level of the hiring and promotion process, though much of this research focuses on traditional employees rather than freelancers. Laws like the Pregnancy Discrimination Act, which prevents employers from discriminating on the basis of pregnancy, childbirth or related medical conditions, don’t cover independent contractors.

One way to dispel potential negative assumptions is to set realistic expectations for what you can deliver before, during and after leave, and to show that you’ve thought about ways to maintain that client relationship throughout the process, said Liz Morris.

“You want to send signals that actually you are still committed to the job and the client is still a really high priority,” she said.