All about the surrogate's lost wages provision
Becoming a surrogate is a remarkably selfless commitment. There’s no doubt that a surrogate’s compensation is one of the most crucial factors to consider in the contract stage. Aside from compensation, there are additional expenses that need to be paid for the surrogate, and one of the most important is reimbursement for lost wages. It is important to have a clear and concise agreement in place between all parties involved.
Why are Surrogates Paid Lost Wages?
Typically, working surrogates will be paid for lost wages by the intended parents for extended time off work due to their pregnancy. Unlike other benefits, the lost wages could vary from little to none, to unexpectedly high. This is because in gestational surrogacy arrangements, the surrogate is not supposed to pay money out of her pocket for the journey. The lost wages provisions are meant to make the surrogate whole if she misses work, and there is no way to predict in advance how much work a surrogate will miss due to pregnancy or after delivery.
The lost wages provision typically covers periods of time where the surrogate is restricted to bedrest or has work restrictions that limit her activities because she is unable to work due to pregnancy and delivery.
To claim, lost wages, a contract will usually require the following:
1. A doctor’s note that specifies the start and expected end date and nature of the work restrictions or bedrest.
2. Proof of employment at the time of the claim.
3. Multiple paystubs to demonstrate current rate of pay.
What Are the Limitations On A Surrogate’s Lost Wages?
During the pregnancy and before delivery, the parties usually do not have a cap on lost wages, and rarely will a surrogate agree to limit lost wages to a certain dollar amount. After delivery, it is standard for contracts to have a cap on the number of weeks of lost wages. In most cases, the limit for lost wages is 4-6 weeks post-delivery for a vaginal delivery and 6-8 weeks for a c-section. This number of weeks mirrors the time frame under the Family Medical Leave Act (FMLA).
Some surrogates also negotiate to have lost wages for their medical appointments, while others have a monthly allowance that covers these lost wages.
Meanwhile, for self-employed surrogates, lost wages are sometimes not included unless they can prove their earnings rate during the contract negotiation.
Lost wages can either be gross or net wages. Sometimes the wages are limited to net wages (the gross wages after state and federal taxes, unemployment, and disability withholdings) as opposed to the gross wages, as this might be the amount the surrogate would have taken home had she worked. Others argue that gross wages are more appropriate since the surrogate may still be responsible for taxes on lost wages.
In states where there is disability insurance coverage, the surrogate should be required to apply for disability insurance. What the disability insurance pays the surrogate directly will reduce her actual lost wages by as much as 60-65%. We have other blog articles about how surrogates can apply for disability insurance in California, Washington, and New York.
If lost wages are expected to be large and there is sufficient time, consider applying for a short-term disability policy well in advance of the journey. A short-term disability policy may require being in effect 10 months or more before pregnancy is covered.
If you need help with a gestational surrogacy agreement, including understanding lost wages provisions, be sure to work with a surrogacy attorney who has experience with surrogacy laws and understanding lost wages in your state. The attorneys of Tsong Law Group are licensed in CA, NY, IL, WA, AZ, NY, OK. If you need assistance in one of these states, contact us today.
This article is for informational purposes only and should not be relied upon without additional research or consulting an attorney. This article is not legal advice and does not create an attorney-client relationship with the reader.