Short Term Disability

Posted in Human Resources Terms, Total Reads: 1555

Definition: Short Term Disability

Short term disability is a type of insurance that provides a fraction of the salary to an employee, for a specified amount of time, if he cannot attend his job due to sickness or injury. (Excluding on-the-job injuries, which are covered by workers compensation insurance)

A typical short-term disability insurance policy in the US provides you with 40-65% of the worker’s pre-disability base salary.

A short term disability policy can be an employer or employee paid benefit. Also, various separate insurance policies are available in this regard. Some states in the US mandate that short term disability benefits be paid by the employer. The State Laws also specify the amount and duration of the benefits to be extended to the employee.

Companies have different personnel policies regarding short term disability benefits, under the purview of the law of the location in which the company operates. Coverage may start immediately or after a pre-fixed period of time. Many times, employees are required to expire their sick leaves before the short term disability period initiates.

Hence, this concludes the definition of Short Term Disability along with its overview.

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