Whether you’re preparing to give birth or welcoming an adopted or foster child into your home, it’s not uncommon to need some time to adjust to your expanded family dynamic. While the idea of parental leave is ideal, the reality is that it isn’t guaranteed in the United States.

Some companies offer comprehensive parental leave that allows for an extended time away from the office and still provides some form of compensation while you’re recovering or bonding with your child.

However, this is an exception and not the norm in the United States. In many cases, parents are left scrambling, trying to figure out how they can afford to be technically unemployed or underemployed while taking the time needed to adjust to the new realities of parenthood.

Knowing what to expect can help ease some of the financial unknowns of becoming a new parent. Read on to learn more about what’s covered and how to prepare.

Paid parental leave isn’t a legal requirement in the United States. The Family and Medical Leave Act (FMLA) may provide some job protection while you’re on leave, but it’s limited in scope.

To qualify for FMLA, you must:

  • be a government employee
  • be an employee at a public or private elementary or secondary school
  • work at a company with 50 or more employees who are employed within a 75-mile radius of your work location

You also must have worked with your employer for at least 12 months and worked at least 1,250 hours during that time.

That means if you work for a small business, work part-time, or have recently started working for your employer, you may not qualify for FMLA coverage.

For those who qualify, FMLA supports up to 12 weeks of unpaid leave every year for the following reasons:

  • birth or care of a newborn, including for people who have children via surrogate
  • placement of a child from adoption or foster care
  • becoming a caregiver for an immediate relative (spouse, parent, or child)
  • medical leave because you are unable to work due to a health condition

FMLA provides only unpaid leave. Any extra time taken before the delivery of the baby, such as for pregnancy complications, can be counted against the 12-week reserve allocated to FMLA. That means if you take time before the arrival of your baby, you may not be able to take a full 12-weeks after they’re born.

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Some states have their own paid family and medical leave requirements. The following states have all passed paid family and medical leave laws:

  • California
  • Connecticut
  • Colorado (will go into effect in 2023)
  • Massachusetts
  • New Jersey
  • New York
  • Oregon (will go into effect in 2023)
  • Rhode Island
  • Washington, D.C.
  • Washington

Similar to the federal FMLA, parental leave in these states also applies to parents who expand their family through surrogacy, adoption, or foster parenting.

In all of the states, the focus is to expand on the existing FMLA structure by requiring paid leave in addition to time off from work.

Who offers the most benefits?

Strictly focusing on the parental aspect of state FMLA laws, these states offer the most coverage, at 12 weeks of paid parental leave:

  • Connecticut
  • Massachusetts
  • New York
  • Washington

Both Oregon and Colorado will also begin offering 12 weeks of paid parental leave in 2023.

New Jersey and California both offer 8 weeks of paid parental leave. Rhode Island offers 4 weeks of paid parental leave.

Are any other states considering paid parental leave?

While only one-fifth of U.S. states have passed paid parental leave legislation, 17 states currently have paid family leave policies under consideration through legislation.

While paid family leave isn’t required at the federal level and is enforced in only 10 states, private companies can and do offer parental leave.

Initially this focused on maternity leave, but paternal leave is continuing to grow in popularity, especially as social views around the importance of early bonding by both parents continue to grow and be in demand by employees.

However, if you live in one of the 40 states where legislation is either pending or not even on the books, parental leave offered by private companies can vary widely.

According to a 2018 survey conducted by the Society for Human Resource Management (SHRM), only 35 percent of private companies offered some form of paid maternity leave in 2017.

But that leave can vary

The amount of paid leave can vary. In the most generous example from 2015, the Gates Foundation offered a full 52 weeks of paid parental leave after previously providing 16 weeks.

However, employee feedback showed that while the generous offer was appreciated, many employees felt a year at home was too long. Eventually, the philanthropic organization adjusted paternal leave to 6 months.

So what’s the norm?

SHRM noted that in 2016, the average maximum maternity leave offered was 14.5 weeks. However, a connection can be found among job position, the size of the company, and the amount of paid leave given.

Often, salaried or nonunion employees may have access to more paid paternal leave than hourly employees. And in many cases, maternity leave for the birthing parent offers the most benefits, with reduced timelines for the non-birthing parent or, in the case of adoption or surrogacy, parents.

Even if you work for a company that offers paid leave, that doesn’t always mean you’ll get full pay.

In some cases, you might get half your usual wages. Or you may get full pay for only a certain period, then switch to half pay or unpaid time off. You may also not be paid until after returning to work.

While any money coming in is still good, you’ll likely have a deficit that needs to be covered. The average leave taken ranges from 4 to 8 weeks. But regardless of what your timeframe is, you’ll need to think about how you’re going to cover monthly expenses.

Consider your current expenses, as well as current savings

If setting aside savings is an option for you, a good rule of thumb is to look at your monthly take-home pay multiplied by the total parental leave period as a goal to save. This will ensure that your expenses are covered and that you won’t feel the squeeze or be forced to return to work earlier than you anticipated.

In the months leading up to the arrival of your baby or child, take a hard look at your monthly expenses. Are there any extras you can cut from your budget? If so, funnel any savings straight into a savings account.

And if you can’t save the full amount you think you’ll need, remember that any extra money you can set aside will help.

Quick tip

If you’re setting up a new savings account, look for a high interest, no-fee savings account. This can be an easy way to earn a little extra money just for setting aside savings.

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Consider your extra expenses after baby comes, too

Adding children to your family means expenses will rise. Whether that means the addition of formula and diapers or additional food and clothing for adopted older children, these need to factor in your calculations.

Keep in mind that there are many options for access to free or low cost resources for babies and children, too. It’s a good idea to research these ahead of time, so you can figure out everything you’ll need to do to access or qualify for any of these programs.

How many diapers will you need?

For diapers, expect to need anywhere from 8-12 diapers per day for the first few weeks, and anywhere from 8-10 diapers per day for the first 4-6 months. You’ll also want to plan on several packs of wipes per month, plus a few tubes of diaper cream.

For more on diaper costs and needs, view our diaper guide.

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Consider child care expenses for after your return to work

If you’re planning to return to work after baby, you’ll also need to think about child care. If you’re considering a day care facility, know that many will require a deposit to hold your spot and a month’s tuition paid upfront.

If you find a caregiver, like a nanny, you can pay daily or weekly. But keep in mind that depending on your employer’s pay cycle, you may need to pay for several days or even several weeks of child care before you start receiving your regular paychecks again.

To help you plan for child care, call different day cares well ahead of time to ask about monthly costs, and talk with other parents who have nannies to get an idea for the average rates in your area.

Don’t be shy about asking for help from friends or family members, especially if you need temporary coverage when you first return to work and are waiting for your first paychecks to come in.

If you live in a state with required paid leave, you may already know the bare minimum that has to be provided.

But it still doesn’t hurt to ask your company’s human resources, or HR, department what your options are. In some cases, your employer might offer more leave or may give you the option to combine vacation or sick days to extend your parental leave.

In other scenarios, your company may not offer paid leave but may support you filing a short-term disability claim that can cover some of your wages while you’re out of work. Some companies provide short-term disability policies to all employees as a benefit.

Keep in mind that pregnancy is considered a preexisting condition, so if you don’t already have a policy through your employer, you may want to secure one before you conceive.

If you receive health insurance through your employer, you’ll need to update your policy to accommodate the new addition to your family.

Questions for HR

Here are some questions to ask your HR representative:

  • Do I qualify for any paid parental leave? If so, what do I need to do to receive my benefits?
  • How are my insurance premiums handled while I’m on leave?
  • How much time can I take off? For how long will my current position be secured?
  • How are my benefits paid out? Will I be paid while on leave or will I have to wait until I return to work?
  • What happens to my 401k plan while I’m out?
  • Do I have to use all of my saved paid time off before I can begin to receive other benefits?
  • Will you help me with the paperwork for state benefits?
  • What happens if I need additional time off due to complications?
  • Does my employer offer any child care benefits I should know about?

If you live in a state with paid family leave policies, it’s always a good idea to start by looking at the state department of labor website to determine what paid options are required by law.

Even if you don’t live in a state with paid family leave regulations, check their websites regarding child care and health insurance to get assistance with updating health insurance policies or learning about options to offset expenses associated with child care.

When planning for parental leave, certain resources can help you understand your options.

Check out your local state laws to see whether you have any state or federally mandated coverage, and speak with your HR representative, who can help you navigate state and federal benefits in addition to any additional benefits your employer may offer.

You may also want to consider looking into free or low cost programs that may help cover some of your expenses after your new baby or child arrives.