When your employees are sick, injured, pregnant, or need to care for a family member, they might want to take a leave from work. The type of leave an employee can use might be confusing to both you and the employee.
There are many ways employees can take leave, including short-term disability and FMLA leave. Employees can sometimes choose between short-term disability and FMLA leave. They might even use one type of leave in a certain situation and the other type of leave at another time.
But, when can employees use these types of leave? What’s the difference between short-term disability and FMLA leave?
The difference between short-term disability and FMLA leave
Here is a breakdown of both short-term disability and FMLA leave. Each section has information on qualification, paperwork, benefits of the leave type, and length of the leave.
For the most part, short-term disability (STD) is part of a private insurance program. Employees must be covered by an STD policy to use the benefits. Either you or the employee can pay for the insurance policy.
As an employer, you can offer an STD plan to your employees. If you don’t offer an STD plan, employees can purchase the insurance elsewhere.
Five states have state disability insurance: California, Hawaii, New Jersey, New York, and Rhode Island. In these states, employers are required to purchase STD insurance for employees. If you are an employer in one of these states, you might be able to choose between a state or private policy. And, you might be able to choose between paying the policy yourself, having employees pay it all, or sharing the cost.
Most employees qualify for short-term disability insurance. They just need to meet the criteria made by the insurance provider.
The requirements to get short-term disability insurance vary. Many insurance providers have requirements about the employee’s minimum earnings and the length of time worked at the business. Many policies only accept full-time employees, but some might accept part-time employees.
Short-term disability requires proactive paperwork. This means employees must fill out a policy application before they need to use the leave. If an employee wants to use STD benefits and then fills out the insurance paperwork, the employee will not qualify for the benefits.
You can think about STD insurance like car insurance. You can’t cause a car crash and then apply for an insurance policy to cover the damage. You need to have the insurance coverage before you need it.
If an employee does have a claim and wants to receive STD benefits, the employee will need to complete a claims form. You and a doctor will need to sign this form.
Short-term disability benefits
Short-term disability insurance covers leave from work for a temporary disability, such as pregnancy, accidental injuries, and illnesses.
STD insurance replaces a portion of the employee’s income, which is a huge benefit for employees. The percentage of income paid depends on the insurance plan. The replacement income comes from the insurance company, not your business.
Things not included in short-term disability
Short-term disability does not cover some health and disability conditions. STD insurance does not cover preexisting conditions. It also does not allow for time off work to take care of a sick family member or to adopt a child.
The insurance often does not cover workplace injuries. If an employee is injured at work, they should submit a workers’ compensation claim to receive benefits.
STD insurance also does not protect employee jobs. You can terminate an employee while they are on disability leave. The insurance also does not guarantee an employee’s health insurance will continue while they are on leave.
Length of leave
The length of STD leave an employee can take depends on the purchased insurance plan. Like any insurance, the better, more expensive policy offers the most extensive benefits.
STD leave can last anywhere from a few weeks to a few months. Some plans last longer—anywhere from 12 to 24 months—but these plans are likely more expensive to purchase.
The Family and Medical Leave Act (FMLA) is a federal regulation that allows qualifying employees to take a leave from work for medical and family reasons. Employees do not have to purchase anything, as this is not a type of insurance.
Not all employees qualify for FMLA leave. To use FMLA leave, an employee must be personally eligible and you must be an FMLA-covered employer.
You are an FMLA-covered employer if:
- You employ 50 or more employees within a 75-mile radius of your business.
Employees are eligible for FMLA leave if:
- They worked for you for at least 12 months (do not have to be consecutive months)
- They worked at least 1,250 hours during the 12 months immediately before taking leave
Both part-time and full-time employees can use FMLA leave.
FMLA requires reactive paperwork. This means employees do not fill out any paperwork until they need to use the leave. Employees do not complete any paperwork in advance.
Once a medical or family need arises, employees need to complete FMLA paperwork. A doctor will need to complete paperwork too.
FMLA leave benefits
Employees can use FMLA leave for:
- The birth, adoption, or foster care placement of a child under FMLA parental leave
- The care of a spouse, child, or parent who has a serious health condition
- The care of a personal health condition that makes the employees unable to do their job (see FMLA bereavement)
- A situation that requires attention because of the military deployment of a spouse, child, or parent
When an employee uses FMLA leave, their job and health insurance benefits are protected.
Things not included in FMLA leave
While an employee’s job is protected under the FMLA, employees will not receive any wages while using FMLA leave. Instead, FMLA leave is unpaid.
Length of leave
Employees can use a maximum of 12 weeks of FMLA leave. Employees can take the leave consecutively or intermittently. FMLA leave can only be used intermittently in some cases, such as medical therapy that cannot be performed outside of work hours. You can also grant intermittent leave for the birth of a child or the care of a family member.
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