What happens if I don’t go back to work after maternity leave? Are there penalties?

The question of going back to work after maternity leave isn’t always an easy one, especially if you’re on the fence. Whether it’s a last minute gut decision or something you’ve always planned for, working moms often ask if there are potential ramifications or penalties of not going back to work after leave.

Unless there was a contractual obligation – like a signed agreement – for you to return to work after maternity leave, an employer usually wouldn’t have legal recourse. But, in some instances, an employer can require you to pay back the health benefit premium if you don’t go back. Bahhh, what!? So, before you send in your resignation letter, let’s talk more about the laws allowing employers to recover premiums and what some of the loop holes are.

The following applies to California moms who will take CFRA leave followed by PDL/FMLA leave. 

According to CFRA laws, “an employer may recover the premium that the employer paid for maintaining group health care coverage during any unpaid part of the CFRA leave.” (Emphasis is my own). Note the emphasis on UNPAID. If you are eligible to take 6 weeks of paid PFL during CFRA, you’re technically only on the hook to pay back premiums during the last 6 weeks of UNPAID CFRA. Also as a reminder, per PDL, FMLA and CFRA laws an employer must maintain your health care benefits while on leave – read more common questions here.

While making the life decision to be the full-time caretaker of your child is an exceptional and valid one, there may be other circumstances that require you not to return back to work. Your employer cannot require you pay back your portion of the premium if your failure to return was caused by the continuation, recurrence or onset of a serious health condition that would entitle you to family or medical leave, or by other circumstances beyond your control. The term “circumstances beyond the employee’s control” is quite nebulous. The CFRA laws don’t specifically define it, but the FMLA does:

“Other circumstances beyond the employee’s control. Examples of other circumstances beyond the employee’s control are necessarily broad. They include such situations as where a parent chooses to stay home with a newborn child who has a serious health condition; an employee’s spouse is unexpectedly transferred to a job location more than 75 miles from the employee’s worksite; a relative or individual other than a covered family member has a serious health condition and the employee is needed to provide care; the employee is laid off while on leave; or, the employee is a key employee who decides not to return to work upon being notified of the employer’s intention to deny restoration because of substantial and grievous economic injury to the employer’s operations and is not reinstated by the employer. Other circumstances beyond the employee’s control would not include a situation where an employee desires to remain with a parent in a distant city even though the parent no longer requires the employee’s care, or a parent chooses not to return to work to stay home with a well, newborn child.” (825.213 (2))

Okay, so now that we know your employer can make you pay back your premium if you don’t go back to work, let’s discuss an interesting loop hole. The CFRA law states that “an employee is deemed to have failed to return from leave if he/she works less than 30 days after returning from CFRA leave.” It goes further on to say that “an employee who retires during CFRA leave or during the first 30 days after returning is deemed to have returned from leave.” What does this mean? According to the laws, as long as you go back to work for at least 30 WORKING days there is no risk of you having to pay back your premium.

But here’s the thing…I’m not saying you should just go back to work for 30 days and quit. I’m just simply translating the law. If you absolutely know you aren’t going back to work, or even have doubts, talk to your manager or a trusted HR rep about your situation to confirm these details.

For non-California moms or folks who didn’t take CFRA leave, FMLA laws around this is similar. Read the full text of FMLA laws under the “Employer Recovery of Benefits Costs” section here

 

Using Sick, Vacation and PTO during maternity leave

It’s no secret that you’re going to try to stretch out every last minute and dollar out of your maternity leave. No shame in that game! One obvious method is to utilize any of your accrued sick, vacation, or PTO time to offset the reduction in pay. There are restrictions and regulations to doing this, so read on for more knowledge.

NOTE: The following applies to usage of sick, vacation and PTO while you are receiving wage replacements from State Disability Insurance (SDI) and Paid Family Leave (PFL). 

Sick Leave

The EDD treats sick leave as wages earned, so you can’t receive SDI or PFL benefits for any time you are receiving sick leave wages that are equivalent to your full salary. 

But wait, there’s a caveat to this! You can coordinate or integrate a portion of sick leave pay to make up the difference between the SDI/PFL benefit amount and your normal full wage. So, by combining 45% of sick leave with the 55% SDI/PFL benefit, you can theoretically get 100% of your normal gross weekly wages for the benefit period, or up until you’ve exhausted your accrued sick time. Here’s an example provided by the EDD:

An employee’s current gross weekly wage is $500. The weekly benefit amount from PFL is $275 [note: 55% of $500]. The $500 minus $275 equals a $225 per week wage loss. Consequently, the employer can integrate/coordinate a maximum amount of $225 per week in gross wages to the employee, resulting in the employee receiving the equivalent of his/her normal weekly gross pay.

Integrating/coordinating your sick leave will not affect your eligibility for SDI or PFL benefits. If you and your employer decide to go this route, your HR rep must notify the EDD that only 45% of wages are being paid, otherwise you may be denied benefits.

Vacation Leave

SDI: Vacation pay is not in conflict with SDI benefits, so your employer can pay you vacation time while receiving SDI benefits at the same time.

PFL without CFRA: If an employer requires that vacation be used during PFL, then vacation pay is in conflict with PFL and will need to be supplemented.

PFL with CFRA: If you are CFRA-eligible, an employer can not require an employee to use sick, vacation, or PTO while receiving PFL (as per CFRA reg 11092 b(3)). As such, vacation is not in conflict with PFL, and you’ll be able to receive both at the same time without it affecting PFL benefits.

Additionally for vacation and PFL, regardless of being CFRA eligible, an employer may require you to use up to 2 weeks of accrued vacation (but not sick) before receiving PFL benefits. This has no affect on your PFL amount once it kicks in.

Paid Time Off

While receiving SDI or PFL, PTO pay is considered the same as sick leave wages, if the payments are made as a replacement for sick leave when you’re out on leave.

This means that if you just accrue PTO, as opposed to sick and vacation time, then the only way to utilize PTO to offset pay reduction is to integrate/coordinate it with your SDI/PFL benefits.

Vacation/PTO/Sick Usage Situations

So, now that we’ve gone over how we can use vacation, sick and PTO time, let’s discuss common usage situations.

Unpaid CFRA time: In most traditional maternity leave scenarios (aka uncomplicated pregnancy with vaginal delivery), you’ll get partial pay for 16 out of the 22 weeks of maternity leave via SDI and PFL benefits (see timeline below). [Check out this post for a thorough overview on maternity leave].

FMLA/CFRA Eligible Maternity Leave

FMLA/CFRA Eligible Maternity Leave

As you can see from the timeline, the last 6 weeks of CFRA are unpaid. So, what to do? According to CFRA laws, you can chose (or an employer may require you) to use any accrued vacation time or PTO time during the unpaid portion of the CFRA leave. You can use sick leave during this time only if the leave is for your own serious health condition or any other reason mutually agreed between you and your employer.

7-day waiting period: There’s a mandatory 7-day unpaid waiting period that you have to serve before receiving SDI benefits. (Benefits are paid once the waiting period has been completed and all other eligibility criteria are met.) During the non-payable waiting period, you are allowed to utilize any form of wages paid by employer (sick, PTO, vacation, etc) to make up for the loss of wages. As mentioned above, there is no additional seven-day waiting period for a PFL claim to bond with a newborn when the PFL claim follows the DI pregnancy-related claim.

How did I navigate the system, you ask?

I was able to coordinate/integrate over 100 hours of accrued PTO (my company only did PTO; no separate vacation or sick time) with 160 hours of company-sponsored leave pay (company perk), giving me full pay for about 14 weeks, 6 weeks partial pay, and 4 weeks unpaid during my 24-week maternity leave. Not too shabby, right?

How did you utilize your sick, vacation and PTO time during your maternity leave? Tell us about it in the comments.