If one of your employees has a chronic illness or is unable to perform their job functions as a result of injury or illness, that employee may need to take disability leave until they are able to work again. As an employer, you need to understand what disability leave is, how it differs from other leave policies, and what your obligations are concerning disability leave for your employees.
What is disability leave?
Disability leave is a leave of absence granted to employees who have become unable to perform the functions of their job as a result of a physical or medical condition, or temporary disability, with or without reasonable accommodation. The Americans with Disabilities Act ensures that any employee who cannot perform their job functions has the right to take disability leave or to a reasonable accommodation. The ADA applies to any employer with at least 15 employees. It's important to note that any injuries or illnesses that occur on the job are typically covered by workers' compensation, not disability.
Disability leave does not count as paid time off (PTO), but rather as an approved absence provided as an accommodation. Generally, short-term disability leave is provided as part of a private insurance program. Employees must be covered by a short-term disability policy to make use of the benefits. As an employer, you can offer short-term disability plans to your employees, or they can choose to purchase one elsewhere.
"Disability leave is not a required form of leave to offer employees," said Peter Horne, content lead at Geoff McDonald & Associates. "It's an insurance policy that employers may offer to employees or which employees can pay for themselves if need be, whereby they're compensated for a portion of their income while they're out on FMLA leave."
What is the difference between FMLA and disability leave?
The Family and Medical Leave Act, or FMLA, is a labor law that requires employers to provide employees with unpaid leave for family issues, such as adoption, pregnancy, family or personal illness, or military leave. It also ensures the continuation of health insurance coverage and job protection while the employee is away from work.
"FMLA broadens protections and coverage across a range of situations preventing the employee from working," said Jim Pendergast, senior vice president and general manager at altLINE. "That could be medical, but it might also be because of a family emergency, an adoption, or because of situations related to military deployments, for instance."
FMLA guarantees any employee who has been working for at least a year for an employer with 50 or more workers the right to take up to 12 weeks of unpaid leave to recover from a serious health condition or injury, as well as the ability to return to the same job or a job that is equivalent in pay and benefits after their leave.
"The main difference between FMLA and a disability leave is the compensation," said Lewis Mayhew, CEO and founder of South Scaffolding. "FMLA-eligible employees are not paid [during the leave], and [it] usually applies to an employee's family but also to the employee's own health condition as well. Disability leave is a doctor-approved personal injury or illness, and compensation is at the discretion of the employer. FMLA is also applicable to employees who have worked in an organization for at least a year, so it is ideal for long-term employees."
Who is covered under disability leave?
Most employees are eligible for disability leave, provided they meet the requirements of their insurance provider. In addition, many providers have eligibility requirements as to the employee's minimum earnings, how long they have been an employee, and whether they are a full-time or part-time worker.
To qualify for disability leave under the ADA, the employee must have a physical or mental impairment that significantly limits one or more "major life activity" or "major bodily function." Chronic conditions, such as cancer and Crohn's disease, can also qualify as disabilities. The ADA defines major life activities as:
- Performing manual tasks
- Taking care of oneself
These are some of the major bodily functions that may be impaired:
- Immune system
- Digestive system
- Cell growth
- Neurological system and brain
- Circulatory system
- Endocrine system
- Reproductive system
Types of disability leave
There are two main types of disability leave: short-term and long-term.
Short-term disability (STD) leave is an insurance benefit that provides compensation or income replacement for non-job-related injuries or illnesses that leave an employee unable to work for a limited time. Additionally, short-term disability policies will pay for employee benefits for a limited time, such as for three months to a year. Generally, short-term plans are cheaper when purchased as part of a group plan used as a company-paid benefit. Employers in California, Hawaii, New Jersey, New York and Rhode Island are required to purchase STD insurance for their employees.
Long-term disability (LTD) leave pays benefits for anywhere from two years to life, depending on the employee's condition and the policy. The premium goes up the longer the benefit period.
The two types of policies are designed to work together, since STD leave is meant to cover an employee immediately following a serious injury or illness, while LTD insurance is meant to replace income if an employee is kept out of work past the end of their short-term disability benefits period.
Short-term and long-term disability benefits work together by having short-term policies pay for employee benefits during the waiting period before long-term benefits (if necessary) kick in.
What are an employer's responsibilities regarding disability leave?
As an employer, you need to know what you are required – and not required – to provide or do regarding disability leave. Here are six of the most important things to know.
1. You are required to purchase STD insurance in certain states.
If you are an employer in California, Hawaii, New Jersey, New York or Rhode Island, you are required to purchase STD insurance for your employees. Depending on your state, you may be able to choose between a state and private policy. You might also have the choice of paying for the policy yourself, having employees pay it, or sharing the cost.
2. You are only required to provide disability leave by law in certain situations.
As an employer, you can establish policies that apply to all employees regardless of disability status, but you cannot refuse leave to an employee with a disability if other employees are offered leave. You might also be required to provide reasonable accommodations, such as flexible hours or unpaid leave.
3. You are not required to provide disability leave for an employee's relative.
Under the ADA, you are not required to modify your leave policy to allow an employee to care for a family member – employees can only use disability leave for themselves. However, the FMLA covers unpaid leave for an employee to care for a family member.
4. You are required to hold an employee's job for them while they are on leave.
Under the FMLA, when the employee returns from leave, you must give them either their same job back or a job that provides the same salary and benefits as their previous position. Additionally, you must continue to provide the employee with health insurance during their leave.
5. You are not required to pay employees who are on disability leave.
As an employer, you are not required to provide paid leave under the ADA or FMLA. California, Hawaii, New York, New Jersey and Rhode Island, however, all require some form of paid leave.
6. You must have a certain number of employees for the FMLA and ADA to apply.
The ADA and FMLA only intersect if your business has 50 or more employees. This is because the ADA applies to businesses with 15 or more employees, while the FMLA applies to businesses with 50 or more. Each law also has different parameters as to what qualifies an employee for leave. For example:
- If an employee is injured on the job, they are covered by workers' compensation.
- If an employee has a serious health condition, they are covered by the FMLA.
- If the employee's condition meets the definition of a disability, they are covered by the ADA.