Note From SeedTrust: We are providing this advice from our perspective as an escrow company and from seeing issues and unnecessary stress that comes from lost wages. In no way are we providing legal advice on your specific contract, these are suggestions based on our experience.
What are Lost Wages
Lost wages in surrogacy are reimbursements for surrogacy-related loss of income. These losses may apply to the surrogate and/or her designated companion. Reasons may include medical screening, long-distance travel, medical appointments, physician-ordered work restrictions, bedrest, hospitalizations and post-delivery. The gestational surrogacy agreement (GSA) will provide any specifics such as maximum reimbursement amount or hourly rate of reimbursement for lost wages, when lost wages are applicable and how lost wages should be calculated.
Understanding Lost Wages
Discussions about lost wages can often lead to confusion and unnecessary stress due to the many variables involved. It’s essential to address these variables during the GSA contract review to ensure all parties understand what can be reimbursed and the specifics required for such reimbursements.
The Problem: Unclear Provisions for Lost Wages
One of the most common problems in gestational surrogacy agreements is the lack of clarity regarding lost wages. When the terms are not clearly defined, it can lead to misunderstandings and disputes between the surrogate and the intended parents. This confusion can cause significant stress and tension, particularly if unexpected situations arise that were not adequately addressed in the contract.
Why It’s a Problem
Unclear provisions or ambiguous terms regarding lost wages can create tension if the parties involved have differing expectations about the compensation amount and timing. This can lead to payment delays and potential legal disputes, adding unnecessary stress to an already complex process. For a surrogate, the financial strain may be significant if she is not adequately compensated for time off work. For the intended parents, these misunderstandings can result in additional costs and strain their relationship with the surrogate.
How to Fix It
The solution is to create a clear and detailed GSA that addresses all potential scenarios involving lost wages. Here’s how to do it:
- Specific Payment Terms
The contract should include specific language about payments made to the surrogate to avoid misunderstandings or disputes. The GSA should detail how much the surrogate will be paid and when those payments will be made. Additionally, it should specify what types of expenses will be covered by the intended parents. For example, it should be clear whether the surrogate will be reimbursed for lost wages if she has to take time off work or if she will be reimbursed for childcare expenses.
- Policy for Complications
In the event of complications during pregnancy and delivery that require additional medical care, your surrogacy agreement should include a lost wage policy to cover these additional expenses. Including this provision in your agreement will give you peace of mind, knowing you are prepared for any eventuality.
- Companion’s Entitlements
The surrogate’s companion is typically entitled to lost wages for the time they take off from work to accompany the surrogate. The agreement should outline specifics regarding criteria which must be met in order to be reimbursed. This may include items such as qualifying distance traveled, specific types of appointments, and the number of days allowed per request type or alternatively, provide a maximum per the agreement. The GSA should also outline the process to calculate the companion’s lost wages or outline a flat rate for lost wages that can be reimbursed should be clearly stated in the GSA.
Detailed Provisions to Include in Your GSA
To avoid these problems, consider the following detailed provisions:
Lost Wages for the Gestational Carrier (GC) and Companion:
It’s crucial to establish the intended parents’ responsibility, such as whether they will be responsible for the difference between her regular wage and the amount provided by disability. The contract should state who is responsible for any elimination or waiting periods before payment, including whether paid time off or vacation must be exhausted before disability payments begin. Additionally, it should outline who is responsible for any short-term disability policy premiums and the process for notifying any changes to her policy or coverage.
Eligibility Requirements for Lost Wages:
Eligibility requirements for receiving lost wages should be clearly defined. The agreement should specify if the surrogate is eligible for lost wages when work is missed for appointments and whether there will be differences in reimbursement before, during, or after pregnancy. It should also clarify any mileage or time requirements that must be met for reimbursement and the documentation required. For instance, what if the surrogate is too sick to go to work but does not have a doctor’s note? These scenarios need to be considered and outlined in the contract.
Net vs. Gross Lost Wages:
The GSA should define whether lost wages are calculated as net or gross. If net, the agreement should specify whether it includes all deductions or only required state and federal deductions. It should determine an hourly or daily wage amount and avoid including complex calculations. Furthermore, it should define if other types of pay or commission should be used in calculations and whether raises are allowed. If so, it should set an allowable rate or percentage of the wage increase. The contract should also set a maximum payout for the entire surrogacy journey, with a clear hourly or daily rate and maximum hours per day or week for both the GC and companion. Providing the maximum number of days the companion can be reimbursed for lost wages for each milestone throughout the contract’s life can be very helpful.
Provisions for Self-Employed or 1099 GC or Companion:
For self-employed or 1099 GC or companions, the agreement should specifically provide a daily or hourly wage amount and define the type of documentation that should be provided to support the lost income. It’s also essential to include provisions that discuss what happens if the surrogate changes jobs or becomes employed during her surrogacy if she was not employed before pregnancy.
Bed Rest Maximums:
The contract should specify the type of delivery versus the allowable amount of lost wages and bed rest compensation. Maximum bed rest compensations should be set depending on whether the delivery is vaginal or cesarean. It should clearly define if a physician’s note will be required for all bed rest periods, both pre-delivery and post-delivery. It’s important to communicate the difference between gross and net lost wages during the contract phase. Preferably, the contract should not include complex calculations but rather put in the hourly or daily rate and the maximum number of hours per day or week the GC and companion can be reimbursed for lost wages throughout the contract’s life. Finally, it should clearly define what the companion is entitled to post-delivery, if any.
How SeedTrust Has Made This Easier Through It’s Lost Wages Calculator
Seedtrust’s lost wages calculator offers transparency in wage calculations from the very start of the matching process. By submitting paystubs early on, Seedtrust can provide accurate calculations much earlier in the match. We do this utilizing the current paystubs and basing our calculation process on either the agency’s guidance or any pre-GSA (Gestational Surrogacy Agreement) calculations agreed upon by the parties within the match documents. This early calculation helps support all parties during the drafting and review of the GSA, offering a clear view of the anticipated lost wages throughout the surrogacy journey.
Final Thoughts
When it comes to gestational surrogacy, having a clear and concise agreement in place between all parties involved is crucial. This agreement should include a section on lost wages, detailing what can be reimbursed and how. By doing this, you can help avoid any misunderstandings or disputes down the road.
A well-written GSA is essential to ensure that each party’s needs are properly taken care of throughout the journey, as well as provide peace of mind for everyone involved. Be sure to consult with an attorney familiar with the surrogacy laws in your state to assist you in drafting an appropriate contract. By addressing these key considerations, you can ensure that each party’s needs are properly taken care of, providing clarity and security for everyone involved.