What Is Short Term Disability Benefit?
When unable to work due to an unexpected illness or injury, employees rely on insurance to cover at least part of their usual salaries. If this injury or illness is job-related, they can claim Workers’ Compensation. However, non-job-related absences require Short-Term Disability (STD) insurance or Temporary Disability Insurance (TDI) plans.
Many companies offer short term disability insurance as part of their benefits packages, but several states (and Puerto Rico) have legislation making it mandatory. Though these laws vary as to how the insurance is funded and which employees are covered, in all cases it is only possible to receive the benefit after a 7-day waiting or eligibility period during which time employees will have to rely on any paid sick leave they have accrued.
What Qualifies as Short-Term Disability?
The exact definition of a qualifying short-term disability differs between states, but typically includes disabling injuries, prolonged sickness and pregnancy. Various exclusions apply for self-inflicted injuries or those acquired during illegal acts or acts of war.
Unlike long-term disability benefit, it is usually required only that an employee cannot carry out their job, rather than any job. However, in New York and Puerto Rico the benefit is dependent upon employees being unable to carry out any work for which their training and experience makes them reasonably qualified.
Short-Term Disability Insurance by State
|State||Who is Eligible?||How is it Funded?||How Long Does it Last?||How Much Do Employees Receive?|
|California State Disability Insurance||Employees who earned $300+ in the previous year.||Employee wage deductions of 1% up to a maximum of $1,229.09 per year.||52 weeks, after an initial 7 day waiting period. It is possible for employees who return to work part time to receive partial benefits.||Around 60-70% of base salary, up to a maximum of $1,300 per week.|
|Hawaii Temporary Disability Insurance||Employees who earned $400+ per week for a minimum of 14 weeks in the previous year. Exceptions include federal employees and insurance/real estate agents paid on commission.||Employers are required to maintain private coverage or self-insure but are permitted to deduct up to 0.5% from employees’ wages, up to a maximum of $5.60 per week.||A minimum of 26 weeks, after an initially 7 day waiting period.||Around 58% of average weekly wages up to a maximum $650 per week. However, this is according to the statutory minimum plan and employers can choose to offer more generous policies.|
|New Jersey Temporary Disability Benefits||Employees who earned $200+ per week for a minimum of 20 weeks in the previous year, or at least $10,000 in total.||Employee contribution of 0.26% of wages (up to $350.74 annually) and employer contribution of between 0.1% and 0.75% of wages up to a maximum of between $35.30 and $264.75 per week. New Jersey employers have an option to contribute to the state funded plan, or they can elect to have a private plan approved by the state.||26 weeks (or however long it takes for benefits to equal 1/3 of wages in previous year), after an initial 7 day waiting period. From June 2020, it is possible for employees who return to work part time to receive partial benefits.||From July 1, 2020, employees receive 85% of their average wage of the previous year, up to a maximum of $881 per week.|
|New York Short-Term Disability Benefits||Employees who had worked 4 or more consecutive weeks for a covered employer immediately prior to disability. Exceptions include religious leaders, government workers and high school students./td>||Employers are entitled to demand employee contributions of 0.05% of wages up to 60¢ per week. Any amount required in excess of this must be provided by employers.||Up to 26 weeks in a year, after an initial 7 day waiting period.||Around 50% of salary up to $170 per week.|
|Rhode Island Temporary Disability Insurance||Employees who earned $12,600 in the previous year. Alternatively, employees are eligible if they earned $2,100 in one quarter of the previous year, with total wages at least 1.5x their highest-earning quarter and totaling at least $4,200.||Employee wage deductions of 1.3% up to a maximum of $939.90 per year (attributable to a wage base of $72,300 for 2020).||Up to 30 weeks (depending on previous earnings). Eligibility begins after 7 days. It is possible for employees who return to work part time to receive partial benefits.||A maximum weekly benefit equal to 4.62% of monthly salary up to a maximum of $867 per week.|
|Puerto Rico Temporary Disability Insurance||Employee who earned $150 in the previous year.||Combined employer and employee wage deductions of up to 0.6% per week up to a maximum of $5,740 per year.||Up to 26 weeks in any year, after an initial 7 day waiting period.||A maximum of $113 per week. Agricultural workers receive a maximum of $55 per week.|
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