I'm going to respond to this in two ways - first as the owner of a small company, and then as a mother.
I own a service company with 6 employees. Someone here said you are covered by FMLA, but you are NOT. Small companies with less than 50 employees are subject to completely different rules than larger companies. Do not rely on FMLA or you will be very disappointed.
Second, if I was a cheap and overbearing boss and received your proposal, I would probably be offended and appalled. First because he can not keep track of what you are doing at home while he's paying you to work and second because obviously your attention will be split between baby and job- if he's a cheapskate, why would he want to pay you the same amount as now for not as much work? (Playing devil's advocate here - I'm not saying you wouldn't work as much since I don't know you personally!) Also, I would expect you to pay for the DSL out of your pocket because it's in your home and surely you would use it for more than just work. As far as bringing baby to work, my answer would be "no way". Too much distraction, injuries would not be covered on liability insurance, extra noise, etc. The unemployment is a tricky issue - we as employers have to fill out a form as to WHY you have been laid off or terminated and if he fills in a maternity reason, you will not qualify (in Pennsylvania). If you are going to hand him this proposal, be prepared to address these issues.
Now, as a mother, I would say do not give him any proposal until you are about 6 months along. By then, sales may be better, circumstances all around may be different. Also, as another mother said, it is very tough to work from home with kids. You will be able to get things done while the baby sleeps, but other than that, until he's able to entertain himself in a safe area (play yard, etc), you probably won't get much done. Answering the phone is a special kind of hell because my kids ALWAYS started to cry the minute it rang. Then you have to figure out where your priorities lie - do you drop the call to cuddle the baby, or take care of the customer that you've committed to for your company? And heaven forbid that your boss call and you not take the call or the baby starts to cry during that call! It is not an easy situation. If you are in Pennsylvania, look into Title 20 subsidized daycare - they will pay someone a small amount to stay in your home with the baby while you work at home, or a traditional daycare setting, or with a relative, etc. if you go back to work, depending on your income level.
I wish you the very best in your pregnancy and in this situation,
K.