Coordinating leave and disability

This is a question every HR professional has likely heard many times. That’s because it is incredibly complex – and I write this as someone who works with these programs every day. The world of absence and disability continues to become more and more complex as new programs come into play. Let’s break down each leave type:.

• The federal Family and Medical Leave Act (FMLA) provides unpaid job protected leave to eligible individuals. Many states have adopted unique state-specific versions of Family Medical Leave that also come into play.

• State-mandated paid leave programs including both state mandated disability (SMD), and paid family leave (PFL) or paid family and medical leave (PFML), provide income replacement and, at times, job protection for certain events for eligible employees working in the applicable state.

• Short-term disability (STD) is an employer-sponsored benefit that provides income replacement for an employee’s own disability.

Now let’s look at a scenario where one or all of these programs could come into play.

Sam lives and works in Colorado. She is pregnant, and her due date is February 1, 2024. She has worked for her employer for five years as a full-time employee working 40 hours per week.

Sam’s employer is subject to FMLA and CO PFML, and provides an employer -sponsored STD benefit that pays 66% of her salary for up to 26 weeks. Sam plans to work until she delivers and is planning to have a caesarean delivery on February 1, 2024. Sam’s salary is $90,000 per year ($1,730.77/week).

Here’s how the benefits will likely coordinate:The weekly benefit for CO PFML for employees earning greater than 50% of the state average weekly wage (SAWW) is 50% of the SAWW plus 50% of the employee’s remaining weekly wage capped at a maximum. In 2024, the maximum benefit is $1,100, and this would apply to Sam.

In this example, the employer-sponsored STD plan pays 66% of an employee’s weekly wage and has a one-week elimination period. Typically, STD is offset by PFML, and that is true in this example. In this case, 66% of Sam’s weekly wage is $1,142.31, so her STD would pay $42.31/week when CO PFML also applies, and she is disabled.

Assuming Sam delivers as scheduled via a caesarean delivery on February 1, 2024, here is how her weekly leave and benefits will look:

Sam will receive her core benefit payment through CO PFML, as well as an additional benefit from STD to bring her to 66% of her pre-disability earnings. As of week 9, Sam transitions to bonding and is no longer disabled. The STD will stop paying at this point. Job protection under FMLA, and CO PFML and benefits under CO PFML, will continue through week 12.

Let’s continue to follow Sam’s journey: Sam is finished with her leave and has returned to work. In October, she must undergo surgery unrelated to the pregnancy. This surgery is going to require Sam to be out of work for five weeks. At this point, Sam has exhausted her leave entitlement under FMLA and her leave and benefit entitlement under CO PFML. BUT, she remains eligible for STD, assuming she meets the definition of disability, which in this example, she does. Sam will receive benefits from STD for 4 weeks following her one-week elimination period.

Because Sam’s employer had an STD plan in place, Sam was able to access her disability benefit during her second leave.

This is just one example of how various leave and disability programs work together. This scenario could look quite different if Sam lived in a different state.

The number of paid and unpaid leave programs continues to grow as states work to address the work/life balance needs of their constituents. The need for paid leave is also addressed by employers that provide employer-sponsored leave and disability programs.

It is important to look at the components of each program – whether a mandated leave or benefit, or an employer-sponsored program, to understand how they work alone and with each other. Providing detailed education to employees about these programs will help ensure they are prepared when they need to be away from work. The key pieces of information to understand include:

• Applicability : When does the leave and/or disability apply?

• Eligibility : What are the eligibility requirements (e.g., length of service, hours worked, earnings, etc.)?

• Entitlement : How much time is available? Does the program provide a set entitlement, a leave year entitlement, a per event entitlement?

• Paid or unpaid : Is it paid and if so, how do other benefit payments impact the program?

• Job protection : Does it offer job protection?

• Coordination : How does it work with other programs? Can they run concurrently? Do benefits offset?

Understanding these key components and cascading that information through educational initiatives to employees will set everyone up for a successful absence program.