Learn when to apply FMLA versus short-term disability and how the two can overlap. Design a benefits package that accounts for different types of leave and supports employee well-being while keeping your company aligned with federal and state regulations.
What is short-term disability?
Short-term disability insurance offers temporary income when an employee can’t work due to a non-work-related health issue, including illness, injury, or childbirth recovery. After a short waiting period (usually one to two weeks), employees receive 50% to 70% of their normal weekly pay. This typically lasts up to six months, and when coverage ends, workers with ongoing conditions may transition to long-term disability benefits if available.
STD leave provides income rather than job protection, so many employers coordinate it with FMLA so employees can keep their roles while receiving benefits. It’s also restricted to only cover afflictions that aren’t job-related. For workplace injuries, employees receive workers’ compensation.
Federal law doesn’t require STD coverage, though some states mandate it, including California, Hawaii, and New York.
What is the Family and Medical Leave Act (FMLA)?
The Family and Medical Leave Act is a U.S. federal law that allows eligible employees to take up to 12 workweeks of unpaid, job-protected leave in a 12-month period, with continued group health coverage. It applies to covered employers, which refers to public agencies, schools, and private companies with 50 or more employees. This act ensures employees can return to the same or equivalent roles when their leave ends.
Employees qualify when they’ve worked for the employer for at least 12 months and logged 1,250 hours in the previous year. Although FMLA doesn’t replace income, it protects employment and benefits during approved absences.
While it seems similar, there’s a difference between leave of absence versus FMLA. A leave of absence is a general term for time away from work, and FMLA is a law requiring unpaid, job-protected leave. This mandate provides federal job protection and benefits other leaves may not guarantee.
Common types of FMLA leave include:
- Birth and adoption: Time for birth, bonding, or placement through adoption or foster care
- Employee's serious health condition: When a medical issue prevents the employee from performing their regular work duties
- Care for a family member: Time away from work to care for a spouse, child, or parent with a serious health condition.
- Certain military leaves: Qualifying exigencies (urgent deployment-related needs) or extended leave to care for a service member with a serious injury or illness
What is the difference between FMLA and short-term disability?
FMLA and STD support employees during time away from work when major life events occur, but they serve different purposes. Here’s how the two compare:
Can you use FMLA and short-term disability together?
Many companies run FMLA and STD benefits concurrently. It can be a challenge for People teams to coordinate timelines and regulations, but using FMLA and STD side by side protects both employees and businesses.
FMLA ensures job security and continued health coverage for team members, while STD provides income replacement. When managed together, they support employees and let companies comply with regulations and maintain a people-centric reputation.
When deciding how to structure and coordinate both, consider:
- Compliance and coverage: FMLA applies to covered employers, and several states require disability coverage. Offering both keeps your policies consistent and compliant across locations.
- Business needs and budget: FMLA creates minimal payroll cost but can cause staffing gaps from absent employees. STD adds premiums yet shifts income payments to the insurer.
- Employee retention and satisfaction: Pairing the two reduces financial stress during leave and signals your company values employee well-being, helping you attract and retain talent.
Here are a few tips on coordinating them effectively:
- Look for coordinating opportunities: Run both programs concurrently when eligibility overlaps, such as after surgery or childbirth.
- Manage separate requirements: Pay attention to individual program requirements, including confirming FMLA eligibility and collecting medical certification for STD.
- Communicate continuously: Inform employees how pay, benefits, and job protection interact throughout the leave period.
- Monitor dates: Track eligibility and benefit timelines to avoid errors and overlapping coverage.
With the right strategy, combining FMLA and STD strengthens your benefits program and gives employees confidence the company will protect their jobs and income when they need it most.
FMLA and short-term disability: People team responsibilities
Here are six key responsibilities People Ops teams handle when managing FMLA and STD.
1. Ensure compliance with laws and policies
People teams must keep your company compliant with federal and state laws. For FMLA, that means confirming eligibility, providing required notices, and following the Department of Labor guidelines. Meanwhile, for STD, it includes making sure plan documents match insurer requirements and coordinating benefits with state-specific mandates.
2. Select and manage benefits
For STD, People Ops teams coordinate with insurance companies to manage and approve disability claims. It’s more direct with FMLA—teams handle leave requests themselves, reviewing documentation and approving eligible absences while consistently applying policy rules.
3. Communicate benefits clearly
Explain both programs to your employees early and often, including who qualifies, what they cover, and how they interact with each other and basic paid time off. Provide a detailed leave policy and application instructions in a centralized location, and make sure all staff have access to them.
4. Track leave and eligibility
Accurate tracking keeps everyone on the same page. For FMLA, that means monitoring work hours to confirm eligibility and sending notifications at different stages, including designation of leave and rights and responsibilities. For STD, it includes keeping tabs on waiting periods and benefit duration.
5. Maintain accurate records
Keep detailed records of leave for both programs, including dates and supporting documentation. FMLA records must be retained for at least three years, while STD files (claims and insurance correspondence) should be stored securely and kept up to date throughout the leave process.
6. Coordinate benefits for employees
Situations that fall under both programs require careful coordination to ensure employees receive the right coverage. Suppose an employee requests six weeks of leave for childbirth recovery and qualifies for job-protected FMLA while also receiving partial wage replacement through STD. For concurrent coverage, People teams need to manage eligibility and remaining leave for both programs separately. For instance, if this worker only has four weeks of remaining STD, the team can compensate for the last two weeks with FMLA, though the time won’t be paid.
Offer compliant and supportive leave policies with Oyster
Coordinating these two programs can be complex for distributed teams, especially when each location has its own legal requirements. Oyster simplifies the process. Our platform, backed by People Ops and legal specialists, helps employers design leave policies that align income protection and job security with local regulations and company goals.
With Oyster’s strategic partnership, companies gain access to in-country expertise that keeps policies compliant and people-focused. We work with you to combine FMLA, state disability programs, and employer-paid benefits to meet the needs of your global workforce.
By coordinating benefits through Oyster, you reduce compliance risks and strengthen retention through flexible, supportive leave programs. It seamlessly builds trust, strengthens your business, and ensures every employee feels cared for, no matter where they work.
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About Oyster
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.
