Wouldn’t it be sweet to enjoy both the flexibility of freelancing and the security of paid leave benefits? Each contributes to the wellbeing of working families, after all. But can you have both at the same time?
For California’s 2.83 million independent contractors hustling to keep their businesses and families alive and thriving, this is a puzzle worth solving.
What most California freelancers don’t realize is that we do have an option when it comes to paid leave.
It’s called “Disability Insurance Elective Coverage,” or DIEC, which provides both disability and paid family leave benefits.
Having taken California Disability and Paid Family Leave as an employee twice before, and worked for years with paid leave experts, advocates, and administrators to improve access to these programs, it should have been a breeze for me to line up my third maternity leave now that I’m working as an independent Social Impact Consultant. As it turned out, accessing the program was like a whole ‘nother gig.
DIEC, this little-known state program that provides paid leave for freelancers, shares similarities to other better-known bureaucracies in terms of its hassle factor due to the EDD’s antiquated and often inaccessible customer interface. Nevertheless, participating was still worth it for me. I wrote a separate in-depth Paid Leave Guide for California Freelancers to save others some of the time I spent figuring it all out.
In short, I signed up for DIEC and claimed a total of 18 weeks of Disability and Paid Family Leave benefits for the birth of my third child. Rather than seeing my savings completely dissolve during my leave, those payments gave me time off to heal, breastfeed and bond with my baby, as well as financial cushioning to hire a babysitter so I could shower, get to a yoga class, or just catch up on managing our household of five - staving off the threat of postpartum depression.
California Disability Insurance, available to the self-employed through the DIEC program, covers the period when you cannot perform your regular work due to your own disability or medical condition. Paid Family Leave covers the period when you are bonding with a new child (birth/adoption/foster) or caring for a seriously ill family member. Both are administered by the California Employment Development Department (EDD). Most California workers pay into Disability Insurance and Paid Family Leave through a payroll deduction, but if the self-employed want in, they have to jump through a few hoops to sign themselves up for Disability Insurance Elective Coverage.
Unfortunately, the DIEC program is not for everyone. With hefty premiums, which you are required to pay for at least 2 years, you need to crunch the numbers to see if its potential benefits are worth it. A freelancer with an annual income of $50K would net about $2,835 for a 16-week maternity leave, and that does not account for the considerable unpaid hours she will spend doing paperwork or trying to get through the EDD’s labyrinthine phone system.
Higher-income DIEC participants pay higher premiums, but they also reap higher benefit payouts, making it more worthwhile. Freelancers thinking about getting pregnant should consider looking into it, since they would be more likely to take advantage of both Disability Insurance during pregnancy and following childbirth, as well as Paid Family Leave on top of that.
DIEC may also make sense if you anticipate needing to take time away from your work for your own serious illness or to provide care for a seriously ill or disabled family member. For example, I might need to carve out time off to care for my mom with Parkinson’s in the coming years.
While even having the option of state-run paid leave is special in California, the shortfall with the Disability Insurance Elective Coverage program is that it does very little to meet the needs of lower-income gig workers who cannot afford the time or money it takes to participate. While California was the first state to pass paid leave, our policy is no longer the gold standard, and it’s time to up our game.
The good news is that Governor Newsom is a big champion of Paid Family Leave and government modernization. And while I welcome and applaud his promises to double the length of Paid Family Leave, we cannot overlook the need for a more equitable and accessible option for the growing ranks of independent contractors.
The nature of work is changing, but the need to care for our families is not. I am proud that I was able to figure out how to take a paid leave as a freelancer, but it really shouldn’t be such an accomplishment. Being with family when it matters most is a dignity everyone deserves.
Special thanks to Liz Morris, Sharon Terman, Liz Ben-Ishai, Megan Joseph, and Shebreh Kalantari-Johnson for editing support!