If you’ve decided during maternity leave that you’re not going back, you’re far from alone. The process of resigning is straightforward, but there are a few financial and legal details worth sorting out before you send that email. Handling them in the right order can save you money and keep the relationship with your employer intact.
Check Whether You Owe Anything Back
The biggest financial surprise for many parents is learning they may need to repay health insurance premiums. Under FMLA, your employer is required to maintain your health coverage while you’re on leave, but if you don’t return to work, they can legally recover the employee’s share of any premiums they paid on your behalf during that period. This is spelled out in federal regulations (29 CFR 825.212) and catches a lot of people off guard.
There’s a specific threshold that matters here: if you return to work for at least 30 calendar days, you’re considered to have “returned” under FMLA rules, and your employer loses the right to recoup those premiums. So if the amount is significant, it may be worth going back briefly before resigning. Retiring or transferring directly from FMLA leave also counts as having returned, though that’s less relevant for most new parents.
Beyond insurance premiums, check whether your employer paid for any signing bonuses, tuition reimbursement, or relocation costs with a clawback clause. These repayment agreements are typically in your offer letter or employee handbook, so review those documents before giving notice.
Understand Your PTO and Benefits
Whether you’ll be paid out for unused vacation depends entirely on your state and your employer’s policy. Some states, like California, require employers to pay out accrued vacation upon separation. Many others, like Missouri, treat vacation pay as a discretionary benefit with no legal requirement to pay it out unless a contract says otherwise. Check your employee handbook or HR portal for your company’s specific policy, and look up your state’s labor department website for the legal baseline.
Sick time is almost never paid out at resignation, regardless of state. If you have a large bank of PTO, you may want to time your resignation so it falls after any scheduled payout or after you’ve used remaining days.
State Paid Leave Won’t Claw Back
If you received benefits through a state paid family leave program, such as California’s PFL, you generally don’t need to worry about repayment. These programs provide wage replacement benefits funded through employee payroll deductions. They’re insurance programs, not employer-funded perks, so there’s no obligation to return to your job to keep the money. California’s PFL program explicitly provides benefit payments without job protection, meaning the state treats it as a one-way benefit you’ve already earned.
Your employer-funded benefits are the ones to scrutinize. Any additional “top-up” pay your company offered beyond state benefits may have its own return-to-work requirement written into the policy.
Plan Your Health Insurance Transition
Once you resign, your employer-sponsored health coverage will end, typically at the end of the month in which your last day falls. You then have 60 days to enroll in COBRA continuation coverage, which lets you keep the same plan. The catch: you’ll pay the full premium yourself, plus a 2% administrative fee. For a family plan, this often runs $1,500 to $2,000 per month or more.
COBRA is useful as a bridge, but it’s expensive. If your partner has employer coverage, getting added to their plan during a qualifying life event (your job loss counts) is usually cheaper. You can also explore marketplace plans through healthcare.gov, where losing job-based coverage qualifies you for a special enrollment period.
How to Tell Your Employer
A direct, gracious approach works best. You don’t need to over-explain or apologize extensively. Give two weeks’ notice if you can, though if you’re mid-leave and not planning to return at all, your notice period may look different. The goal is to leave on good terms so you have a reference when you’re ready to work again.
Call or video chat with your manager first. This is a conversation that deserves a human touch, not a cold email. After that conversation, follow up with a formal resignation letter or email. Keep it short and include these elements:
- Your intention to resign and your effective last day
- A brief reason, such as choosing to focus on your family
- Gratitude for the role and your time with the company
- An offer to help with the transition, but only what you can realistically commit to (answering emails, writing up notes on ongoing projects)
Here’s what a simple version looks like:
“Please accept this letter as formal notification that I am resigning from my position as [title] with [company], effective two weeks from today. During my maternity leave, I put a lot of thought into my next steps as a new parent, and I’ve decided not to return to the workforce for now. Thank you for the opportunities I’ve had over the past [X years]. Please let me know if there’s anything I can do to help with the transition. I wish you and the team continued success.”
That’s it. You don’t owe a lengthy explanation, and most managers have seen this before.
Handling the Career Gap Later
If you plan to return to work eventually, the gap on your resume is manageable. For gaps longer than a year, list it in your experience section the same way you’d list a job:
Full-time parent, [City, State], 2024-2026
Provided care for young children and managed household operations.
Keep it brief and factual. In interviews, frame it positively: you made a deliberate choice, and now you’re ready to bring your skills back. Employers are increasingly accustomed to seeing caregiving gaps, and many companies now run formal “returnship” programs specifically for parents re-entering the workforce. Staying loosely connected to your industry through freelance work, online courses, or professional groups during your time away makes the transition back smoother when you’re ready.
A Practical Timeline
If you’re still on leave and have decided to resign, here’s a sequence that protects you financially:
- Review your employee handbook for any return-to-work agreements, clawback clauses, and PTO payout policies
- Calculate potential premium repayment by contacting HR or checking your pay stubs to see what your employer paid toward your health insurance during leave
- Decide whether returning for 30 days makes financial sense to avoid repaying FMLA-related insurance costs
- Line up your next health coverage through a partner’s plan, the marketplace, or COBRA before your current coverage lapses
- Have the conversation with your manager, then send your written resignation
- Confirm in writing any final pay details: last paycheck date, PTO payout, and any amounts owed in either direction
The whole process can take as little as a few days if your finances are straightforward, or a few weeks if you need to coordinate a brief return or sort out insurance. Either way, getting clear on the money before you give notice puts you in the strongest position.