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Short-Term Disability & FMLA 101: How to Advise Your Employees

Posted by Pekin Insurance on Aug 17, 2016

Do you have employees who are pregnant, sick, or injured? If so, they'll likely have questions about the Family and Medical Leave Act (FMLA) and short-term disability. Here are a few tips to help you respond.short-term-disability-and-FMLA.jpg

One day you get an email from Kevin, an employee of yours who just had a non-work-related accident. He'll recover, but his doctor won't clear him to work for six weeks. Kevin wants to know if he will be able to return to his job after the time off. And what about being paid during that time off? Many factors play into short-term disability and FMLA, most of them varying from company to company. There are, however, some basics that everyone should know.

What is short-term disability and FMLA?

FMLA is a federal law that requires employers with fifty or more employees for at least twenty weeks a year within seventy-five miles of any work location must provide twelve weeks of unpaid leave per year in the event an employee has to take care of his or her own personal health or the health of a family or service member. (Yes, we know that's a mouthful.) There are even more criteria that dictate who is eligible for FMLA leave, which you can find on the Department of Labor website. For our purposes, we're just going to assume the employees in question are all eligible.

It's important to also remember that FMLA leave does not have to be consecutive. It provides a total of twelve weeks per year, but that can be spread over multiple injuries or illnesses if deemed medically necessary. As long as the employer notifies the employee that he or she is on FMLA leave, all that matters is that the total comes out to twelve weeks over a one-year period.

FMLA, however, does not require paid leave. That's where short-term disability and FMLA can work together. Short-term disability is a private insurance policy (though some states have public policies as well) that replaces a portion of an employee's income while he or she is out on FMLA leave. The portion varies from policy to policy, but is often around sixty percent. There is typically also a cap on how much an employee may receive in a week or a month, but most employees won't hit that threshold. A short-term disability benefit frequently lasts for up to twenty-six weeks—notably longer than the required twelve weeks of FMLA leave.

Short-term disability is not required. An employer is allowed to choose whether or not to offer a policy and whether or not the employee should be responsible for the premium. There are also no requirements for how much the plan pays out. It may be sixty percent or it may be forty percent. All of that is up to the employer.

Working together ... or not

If there's one thing that's more stressful than suffering an injury or illness or recovering from childbirth and adjusting to motherhood, it's wondering where your next paycheck will come from. For this reason, employees commonly use short-term disability and FMLA leave concurrently. While short-term disability probably won't cover all expenses during the FMLA leave, it offers enough cushion for employees to focus more on recovery and less on finances.

However, an employee may request to opt out of using both short-term disability and FMLA leave. That may sound crazy, but sometimes it makes sense. Let's say Marianne is three months pregnant when she falls and breaks her leg. She has to stay off her leg for a week, but she's a nurse and can't possibly do her job that way. She might request PTO or even unpaid leave so that she can save all of her short-term disability and FMLA leave for when she gives birth so that she has a full twelve weeks with her new child.

The important distinction to remember is that an employer can require an employee to use FMLA while out on leave but may not require the employee to use the short-term disability. If an employee opts out of short-term disability, an employer must allow them to do so. (Just remember an employer still isn't required to pay wages if short-term disability is waived.)

Giving advice

The most important takeaway from this post is that an employer may not give advice to an employee regarding short-term disability and FMLA leave. An employer may only state the policies as they are written. It is entirely up to the employee, his or her family, and any other third party advisors they choose to make decisions about these two policies. It may be tempting to steer an employee in the right direction, but doing so could open an employer up to liability.

Dealing with an employee's need for an extended absence is a very sensitive subject, but it's important to keep in mind who is responsible for what. An employer need only offer FMLA and notify an employee in writing that he or she has been placed on FMLA leave. All other decisions must be left to the employee.

It's more complicated than it sounds

This post is by no means a comprehensive view of short-term disability and FMLA, especially the latter. It is not legal advice, either. There are all sorts of exceptions and disclaimers which are best interpreted by an FMLA attorney.

Also, FMLA is a federal law, but many states have passed their own laws amending or superseding the federal law. We highly recommend that employers become familiar with the statutes in any state where their offices are located, especially in California (which, incidentally, also has local ordinances in San Francisco that amend both the state and federal law).

For all of these reasons, it may actually be a good thing that employers can't advise employees on how to use short-term disability and FMLA. With so many variables, it's difficult for anyone who isn't fully trained in handling either policy to provide all the necessary (and correct) details. Remember that any time short-term disability and FMLA are used, it's because of an illness, sickness, or pregnancy, all of which can be very emotional events. It's best to have your policies in place so you can focus on wishing your employee a safe and speedy recovery.


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