What to Do If You’re Laid Off on Maternity Leave
With an ongoing difficult job market in 2023, many people and families are facing concerns about being laid off or losing their jobs while away on parental leave.
The job market in 2023 has seen sharp drops as inflation rises, profits decline, and companies feel that they need to cut costs. This is especially true in the tech fields, which first bloomed during the 2020 pandemic era and then had major cutbacks once offices opened back up.
Hiring rates dropped 20% from 2022 to 2023. Entry-level jobs that require a degree are seeing the steepest drops.
When you are expecting a baby, you may worry about whether you could lose your job. Maybe your employer won’t want to keep you on board now that you’ll have an additional responsibility, or they don’t want to pay your leave if they have doubts about whether you’ll return to work.
Related: A Guide to Maternity Leave Laws by State: Know Your Rights
Depending upon where you live, you may have some job protection in place during your parental leave. However, in a tough job market, it’s almost impossible to have no risk at all of losing your position.
It’s important to know your rights and to be prepared for what to do if you do end up getting let go around the time you have a new baby.
Can You Be Laid Off on Maternity Leave?
In the United States, there is no specific law that says you cannot be laid off while you are on maternity. However, there are several protections in place that may help prevent it. These protections vary from state to state.
Family and Medical Leave Act (FMLA) Rights
Family and Medical Leave Act (FMLA) is job-protected leave that gives Americans up to 12 weeks time off to care for a new baby. Though this leave is unpaid, it guarantees you the right to return to your position when your leave ends.
FMLA leave may taken consecutively or it may be cumulative. For example, a new mom might take the first 12 weeks of her baby’s life off, while a new dad might take the first 3 weeks off and then one day a week for several weeks after.
If your employer has 50 or more employees, you are likely eligible for FMLA. Check with your Human Resources department to find out if you qualify.
Pregnancy Discrimination Act
The Pregnancy Discrimination Act (PDA) prohibits discrimination on the basis of pregnancy. PDA prevents employers from choosing to lay off or not hire women who are pregnant, or based on the fact that they might become pregnant.
According to this act, an employer cannot lay off an employee because they are pregnant or take maternity leave. However, they can lay off for other reasons while you happen to be pregnant or on maternity leave.
This means that pregnant women or women on parental/childcare leave are not automatically protected from mass layoffs happening at a company.
Rights of Pregnant Employees and New Parents
Along with protection under FMLA and PDA, you may be protected by state or local laws and by your individual employment contract. Employers are also generally bound to fair employment practices, meaning you cannot be discriminated against based on age, gender, pregnancy, or motherhood.
If you receive a layoff notice during your maternity leave, there should be a reason specified for the layoff, other than your leave. Keep in mind that employers can lay employees off for a host of other reasons like poor performance and restructuring.
In some cases, these reasons are valid, while in others, they may be excuses to cover up illegal discrimination toward pregnant employees or employees with children. Seek an employment lawyer if you believe you have been discriminated against.
What Happens When You Are Laid Off During Maternity Leave?
If you or your partner do find yourself in the unfortunate situation of being laid off while on parental leave, you should immediately account for how you will receive financial support and benefits like healthcare after losing your job.
After being laid off, follow up with your employer about these key things.
Notice and Severance
Generally, laid-off employees should be provided with a reasonable amount of notice and you may be offered a severance package. Check your contract or collective bargaining agreement for specifics.
If you were laid off under FMLA or you believe that your job loss was a violation of PDA, speak to an employment attorney. You may have grounds for a lawsuit.
Unemployment Benefits
Laid-off workers may be eligible for unemployment insurance benefits if they lose their jobs. U.S. state laws for unemployment eligibility vary, so get in touch with your local unemployment department to see if you qualify.
Apply for this right away so you can hopefully keep some income coming in while you search for a new job or decide what to do next.
Health Insurance
If your family’s health insurance was through your job, it’s very important to make sure you do not have a gap in coverage. First, find out if continued health insurance is included in your severance package. Then take a look at what you can do next.
You may be offered the Consolidated Omnibus Budget Reconciliation Act (COBRA). This allows you to continue with the same health plan for a period of time (usually 18 months) after leaving or losing a job. However, you are responsible for paying the full premium, so it can get quite expensive.
Other options are switching to your spouse’s employer-sponsored plan if they have one or purchasing private insurance.
Losing your job may mean a hefty drop in income. You may be eligible for a sliding scale option through your state, or you may qualify for Medicaid. Medicaid (or MediCal if you are in California) is free-of-cost government-sponsored health insurance. Call your local office for information about income thresholds and eligibility requirements.
Looking for a New Job on Maternity Leave
Start job-searching soon after you find out you have lost your position. Take some time to process the layoff and take care of your family first, but then hop right back in. Get your resume updated and ask your soon-to-be former employer for a letter of recommendation.
You may also explore the options of staying home with your baby longer or pursuing a work-from-home option.
Preparing for a Layoff While Expecting
It is a good idea to prepare financially for the possibility of losing your job (or perhaps deciding not to return to it) when you have a baby on the way. Here are some ideas for what to do:
Reduce or Eliminate Debt
While you’re still employed, prioritize paying off any credit card bills, overdue mortgages or immediate student loan payments for the next month. This takes a financial burden off you and your family and frees up your resources.
Build an Emergency Fund
It’s a good idea to have three to six months of expenses saved in case of an unexpected event. But any amount makes a difference, so save what you can.
Create a Family Budget
Keep track of all your monthly expenses and figure out where you can cut costs. Even if you already have a good budget in place, with a new baby on the way, you may need to reevaluate your expenses.
Update Your Resume and LinkedIn Page
If you haven’t updated your employment information in a while, go in and make some changes so that you’ll be all set and ready to apply for new jobs if the need arises. And who knows, maybe a recruiter will spot your updated profile and offer you an even better job!
Explore Alternatives to Full-Time Work
If you don’t go back to work, what would it look like to stay home? Without the cost of childcare, would you be in a much different financial situation?
Could you open a business that you could operate from home or work from home in a part-time or freelance capacity? Employment is not the only option, so be open to the alternatives such as pursuing side hustles/freelance gigs or working out a realistic stay-at-home parent arrangement with your partner.
Negotiating Severance on Maternity Leave
If you are laid off, it may be possible to negotiate your severance package. This may even be true if your severance has been laid out in your employment contract.
Request a private meeting with your boss or HR rep to discuss your severance package. Come prepared to discuss the reasons why you think you should be given more in your package. Focus on your strengths and what you have brought to the company.
You also shouldn’t be embarrassed to bring up concerns about your financial situation in this stressful situation. As long as you don’t come off complaining or compare your finances to other coworkers, it’s worth underlining the strain that layoffs when you have a new baby or child on the way may cause.
While there are many protections in place to support you in the workforce when you’re pregnant or on parental leave, the tough job market and ever-fluctuating economy make it hard to be completely confident in any job.
The best you can do is be prepared for the worst and know your rights.
