Short-Term Disability vs. FMLA: What's The Difference?

If you’re an HR professional or a business owner, you know how tricky employee leave policies can be.  Figuring out how to keep things running smoothly when key team members are out isn’t exactly easy—there’s always that risk of project delays and overworked staff. You are always unsure if you’re ticking all the legal boxes to avoid those nasty fines or lawsuits. It’s a lot to keep track of with ever-changing federal and state regulations right?

Managing employee leave policies can feel overwhelming for HR professionals, SME owners, and business leaders in the U.S. Therefore, understanding the differences between STD and FMLA is super important in today’s fast-paced work setting.

But fret not – Savvy HR partner is here to save the day! (Or perhaps your HR department, too.) We have compiled this quick guide that is specifically designed to help our clients—from startups and SMBs to non-profits and growing enterprises—effectively manage these essential benefits. So read on...

What is Short-Term Disability (STD)?

Short-Term Disability (STD) is an insurance setup that helps employees out financially when they can't work because of a medical issue. This could be anything from recovering after surgery to dealing with a serious illness or healing from an injury. Generally, STD coverage gives you about 40% to 60% of your weekly gross income and can last anywhere from a few weeks to six months, depending on the policy. For example, imagine someone at a tech startup needs major surgery. STD would help by covering part of their salary while they recover, letting them focus on getting better without stressing over money.

What is the Family and Medical Leave Act (FMLA)?

The FMLA, or Family and Medical Leave Act, is a federal law that lets eligible employees take up to 12 weeks off in a year without pay but guarantees they'll keep their job during this time. It's there for big life moments—like having a baby, adopting a child, dealing with serious health issues either for yourself or a family member, or handling urgent matters related to a family member's military service. For example, say there's someone working at a non-profit who needs to look after their parent with a serious illness. The FMLA makes it possible for them to take time off work to focus on caregiving without worrying about whether they’ll have a job to come back to. This way, they can take care of their family while knowing their job is secure.

Key Differences Between STD and FMLA

To make things easier, here's a comprehensive table that outlines the key aspects of Short-Term Disability (STD) and the Family and Medical Leave Act (FMLA), comparing them side-by-side:

Aspect	Short-Term Disability (STD)	Family and Medical Leave Act (FMLA)
Compensation	Provides partial salary (typically 50%-70% of regular pay) during the disability period.	Offers protected leave but does not provide pay, though employees may use paid leave.
Duration	Benefits are tied to the length of the disability, often capped at 6 months.	Provides up to 12 weeks of leave within a 12-month period.
Eligibility	Determined by the employer’s insurance policy, often requiring a minimum employment period and medical proof of disability.	Requires employees to have worked for at least 12 months and 1,250 hours, with the employer having at least 50 employees within a 75-mile radius.
Purpose	Addresses the employee’s inability to work due to their medical condition.	Covers a broader range of needs, including personal or family illness, childcare, and situations arising from a family member's military service.
Coverage and Protection	Focuses on financial support; does not offer job protection.	Provides job protection, ensuring employees can return to their job or a similar position after leave.
Applicability and Use	Utilized strictly for the employee’s own health conditions.	Flexible in use; covers employee’s or family member's health conditions, new child bonding, and more.
Application Process and Documentation	Requires medical certification proving disability. Periodic updates may be needed.	Requires medical certification for health-related leaves and proof of family relationship or event for other leaves.

How STD and FMLA Can Work Together?

Often, employees may use STD and FMLA concurrently. Understanding how Short-Term Disability (STD) and the Family and Medical Leave Act (FMLA) complement each other is super important for managing workforce needs effectively.

When an employee requires time off for medical reasons, such as surgery, STD can be instrumental in providing financial stability by covering approximately half of their salary during the recovery period. Concurrently, FMLA safeguards the employee's position and health benefits, so that they can focus on recovery without the stress of job security.

Similarly, STD may offer partial pay during maternity or paternity leave, while FMLA grants up to 12 weeks of protected leave, allowing new parents the necessary time to bond with their child without the worry of losing their job. This dual benefit system supports the employee's transition into parenthood and helps maintain workplace morale and reduce turnover. Understanding and communicating these benefits clearly can empower your teams and promote a supportive and flexible work environment.

Guiding Your Organization

The complexities involved in managing STD and FMLA can be daunting, especially when you want to be compliant and address the individual needs of employees. Mistakes or oversights in handling these sensitive areas can lead to employee dissatisfaction, reduced morale, or legal issues. Therefore, careful management is utmost important.

This is where our expert HR service comes into play. We specialize in offering detailed guidance and tailored solutions that help your organization remain compliant and supportive of your most valuable asset—your people.

Partner with us to streamline the management of STD and FMLA benefits, freeing up your resources to focus on broader business objectives and leadership.