Maternity leave in Japan as a sole proprietor or freelancer

(Motherhood journey: 10 weeks before due date)

This topic gets me riled up!

As of 2023, Japan has robust maternity and childcare leave support for women who work under a corporate full-time worker status. However, 41% of working women are concentrated in jobs that are not a corporate full-time status (including sole proprietors, freelancers, contract workers, or part-time workers who work full-time hours) which means they do not qualify for maternity nor childcare leave financial support.

Since people who are not corporate full-time worker status typically do not receive revenue if they do not work, this means that women either have to strategize how to self-fund their maternity leave or have to go back to work soon after giving birth (assuming they are in a relationship where dual income is necessary, which has become increasingly the case over the past few decades).

To give you a comparison…I spoke with a woman who works for a corporation who took 2 years off for maternity leave and childcare leave (she received 50%-60% of her income during this time). Meanwhile, statistically 20% of freelance women go back to work within one week of giving birth, and 60% within 2 months.

Here’s what I did to self-fund my maternity leave:

While my husband and I did not really have a timeline for when to have children, I knew that making additional efforts to generate revenue would be really important before getting pregnant. 9-10 months of scrambling to generate a cushion for maternity leave seemed way too short, so I’d have to plan ahead.

For starters, I have 3 businesses models:

1. revenue generated from corporate training,

2. revenue generated from high-ticket individuals who hire me directly for a package of coaching, and

3. revenue generated as a subcontractor for coaching platforms based on hourly coaching

When I first started as a coach, I was focused on charging hourly (a similar model to #3). That was difficult to maintain because when you work for yourself, you have to wear many hats and do sales, marketing, admin work, etc., which means that there is a limitation to trading dollars for hours. I switched my mindset to focusing on #1 corporate training (high revenue, short time i.e. 1-day training) and #2 high-ticket individuals for a package of coaching.

The caveat is that even though #1 and #2 sound lucrative, corporate training often has a long runway (meaning the time between when I meet a corporate representative and actually conduct the training could take months), and working with high-ticket individuals requires more time and consistency for networking, marketing, and outreach. So even though focusing on high-revenue generating services is important, I know that when I become a mom that being a subcontractor will be easiest to engage with in the early stages.

A word about Passive Income (automated revenue):

One thing that was a huge help in my preparation is that I sold a licensing contract to a corporation for online videos of content that I was delivering in-person at corporate trainings for them on a regular basis. This had multiple benefits because they paid me a chunk of cash for creating the videos, and we have an agreement where they have to pay me once every year for the next three years a sum that depends on how many views they get. I put a minimum licensing fee into the agreement so I know what I will receive at minimum, even if no one watches the videos. It also means that I don’t have to physically go to their office to do corporate training which is helpful when caring for a newborn.

And here are the challenges I’ve since run into:

Before becoming pregnant, I knew that I would have to build a financial cushion for myself so that I’d have options on whether I’d want to take maternity leave or get back to work after giving birth (without getting forced back into work too soon).

But what I didn’t know until I became pregnant was…

1. Daycare systems in Japan not only have limited space, but also have a point system to determine which children are priorities. What this means is that corporate full-time workers can gain the most points (and therefore priority) because they have a contract stipulating the full-time hours they are required to be away from their child. In other words, sole proprietors, freelancers, etc. need to produce evidence of how many hours they work in order to make a case for themselves to qualify for childcare, and even then they may not receive as many points as corporate full-time workers.

2. Daycare fees are a sliding scale based on income - the more you make, the higher your fees. What happened in my case is that I generated a financial cushion for myself to self-fund my maternity leave, but now I feel penalized because making more money has put me into a higher fee bracket for daycare support. I feel that this challenge incentivizes freelance or sole proprietor mothers to either take more time away from their babies so they can make up for the daycare fees, or to avoid working at all since the numbers don’t make sense (which the Japanese government doesn’t want, since they are aiming for more women to contribute to the economy).

So what we have is a triple whammy of a challenge: no maternity leave financial support, no priority for daycare, and high daycare fees despite no revenue guarantees.

Luckily, I saw a news article that the Japanese government is aiming to provide financial support for sole proprietors and freelancers, though the details of what “financial support” means is unclear (and if it goes through, it won’t be until 2024). Fingers crossed!