Thursday, January 30, 2014

California Pregnancy Disability - 7 Months With a 45% Pay Cut

California has the nation's richest pregnancy and maternity benefits. Four separate laws combine to provide up to seven months of partially paid, job protected leave should the need arise. But the partial pay of 55% means a 45% pay cut during this time. You can better survive a seven-month job hiatus by purchasing supplemental disability insurance before getting pregnant.

Four separate California laws combine to create up to seven months of job protected, partially paid leave. The California pregnancy disability protects your job for up to four months before your delivery should you experience complications. The CA Family Rights Act provides a fresh set of twelve weeks (nearly three months) of job protected leave after your delivery. The California State Disability Insurance (SDI) and Paid Family Leave provide partial income replacement during your pregnancy disability, and maternity leave.

Both the state disability and paid family leave provides a maximum of 55% income replacement up to a hard dollar cap of $987 per week in 2010. At minimum you will be facing at least a 45% pay cut during this time. If your income exceeds $93,316 annually, you will hit the hard dollar cap and your pay cut will exceed 45%.

Seven months at a 45% pay cut can severely damage a family finances, especially when the additional expenses of feeding, clothing, and raising a newborn get added into the picture. Purchase supplemental short term disability insurance before getting pregnant. Your normal labor and delivery will be a covered benefit, and you will close the gap on your big pay cut should the need arise for seven months of missed work.

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