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When a serious health issue or family emergency strikes, your employees shouldn't have to worry about job security—or whether they’ll receive a paycheck. As an employer, you play a pivotal role in supporting your team through life’s biggest moments, from the birth of a child to recovering from surgery or caring for a seriously ill parent.
But understanding short-term disability and FMLA leave—and how they work together—isn’t always straightforward. While both are commonly associated with medical-related absences, they serve very different purposes. Knowing how and when they apply will help you stay compliant, support employee well-being, and avoid costly missteps.
Short-term disability (STD) is a type of insurance coverage that replaces a portion of an employee’s wages when they’re temporarily unable to work due to a non-work-related illness or injury. It’s an optional benefit, typically offered by employers, though individuals can also purchase policies on their own.
Covers temporary medical conditions like surgery recovery, serious illness, pregnancy complications or mental health issues.
Wage replacement usually ranges from 40% to 70% of an employee’s regular pay.
Waiting period (also called an elimination period) often ranges from 7 to 30 days.
Benefit duration typically lasts from 3 to 6 months, sometimes up to a year.
Does not guarantee job protection.
Employers may choose to cover the full premium or offer plans where employees contribute. There are also voluntary options where employees pay the full premium. A healthcare PEO can help you decide which benefit avenue is right for your business.
RELATED: Can We Talk? Avoiding Legal Land Mines with Employees on FMLA Leave >>
Not all short-term disability plans are structured the same. As an employer, you have several options when deciding how to offer this benefit:
The employer pays 100% of the premium. This is often seen as a competitive benefit and can boost employee satisfaction and retention.
The cost is split between the employer and employee. This shared model balances affordability for the business with meaningful coverage for employees.
The employer provides base coverage at no cost, and employees can “buy up” for additional coverage through payroll deductions.
The employee pays the entire premium. While it reduces the employer’s financial burden, participation rates may be lower unless well communicated.
Choosing the right plan depends on your workforce’s size, needs and budget. Axcet HR Solutions can help evaluate your options and administer the plan with ease.
The Family and Medical Leave Act (FMLA) is a federal law that provides eligible employees with up to 12 weeks of unpaid, job-protected leave per year for qualifying family and medical reasons. It applies only to companies with 50 or more employees, and only to employees who have worked at least 12 months and 1,250 hours in the past year.
The birth or adoption of a child
A serious health condition (the employee’s own or an immediate family member’s)
A qualifying military exigency or care for a covered service member
During FMLA leave, group health benefits must continue as if the employee were actively working. When the leave ends, the employee must be reinstated to their previous role or an equivalent position.
RELATED: Unraveling the FMLA in Uncommon Situations >>
No—and this is a common point of confusion.
While they may apply during the same time period, FMLA and short term disability are not the same:
FMLA is a legal job protection—not an income replacement.
Short-term disability is an income benefit—not a legal protection.
You can offer both, but they operate independently.
Yes—FMLA and short-term disability can run concurrently, and often do.
Here’s how it works in practice:
An employee has a baby, major surgery, or is diagnosed with a serious illness.
If they qualify, they take FMLA leave for job protection.
At the same time, their short-term disability policy provides partial wage replacement.
The FMLA clock continues ticking while disability payments are made. After 12 weeks of FMLA, job protection ends—but STD benefits may continue for several more weeks or months, depending on the plan.
| Feature | Short Term Disability | FMLA Leave |
| Type | Insurance benefit | Federal employment law |
| Purpose | Replaces a portion of wages during medical leave for the employee | Protects the employee's job during qualifying medical or family leave |
| Paid? | Yes, typically 40-70% wage replacement via insurance policy | No, the FMLA provides unpaid leave |
| Duration | Typically 3 to 6 months (some plans may extend up to 12 months) | Up to 12 weeks per year |
| Applies to | Employee's own non-work-related illness or injury | Employee's serious health condition, or care for family member, or birth/adoption |
| Job Protection? | No, unless the employer chooses to offer it separately | Yes, job protection is legally required under the FMLA |
| Concurrent Use? | Yes, often used during FMLA leave to provide income while job is protected | Yes, can run concurrently with short term disability if the reason qualifies |
Coverage varies by policy, but typically includes:
Serious illness (e.g., pneumonia, cancer treatment)
Surgery recovery
Pregnancy and childbirth recovery
Mental health conditions
Accidental injuries (non-work-related)
Note: Work-related injuries are generally covered under workers’ comp insurance, not short-term disability.
Most short-term disability policies have a waiting or elimination period—usually 7 to 30 days—before benefits begin. During this time, employees may use PTO or sick leave.
RELATED: How to Help Employees Return to Work After Extended Leave >>
FMLA guarantees job protection only for 12 weeks. After that:
If short-term disability coverage continues, wage replacement may still be available.
Employers are not legally required to hold the job—but many choose to, especially if the employee is expected to return soon.
Be mindful of applicable state laws or your own company policies, which may provide extended protections.
RELATED: What Employers Need to Know About FMLA Intermittent Leave >>
A: Yes. If the employee qualifies for both, short-term disability can provide partial wage replacement while FMLA provides job protection.
A: No. FMLA is an unpaid, federally mandated leave law. Short-term disability is a benefit plan that replaces wages during certain medical absences.
A: The key difference is that FMLA protects the employee’s job but doesn’t provide income, while short-term disability provides partial income but doesn’t guarantee job protection.
A: No. It’s optional unless required by your state. However, it’s a popular benefit and often expected by employees.
Balancing compliance and compassion isn’t easy—but you don’t have to do it alone. As a certified professional employer organization (CPEO) headquartered in Kansas City, Axcet HR Solutions helps small and mid-sized businesses nationwide with:
FMLA administration and compliance
Designing and managing short-term disability plans
Supporting employees through medical leave transitions
Whether you need to navigate a specific employee leave or want to build a benefits package that attracts and retains top talent, we’re here to help.
👉 Schedule a consultation today »
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