vacation and disability usage

Does anyone require their employees to use accrued vacation as part of their short term disability benefits? We currently give 26 weeks of paid disability and would like employees to use their accrued vacation as part of the 26 weeks. Wondering what others do. Thanks.


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  • We offer 100% disability starting day 1. Plan specifically states that vacation cannot run with disability period.
  • Why separate the two if you want them to use vacation to cover time away that short term disability is designed to cover. If you want to ees to use all of their time, go with PTO and then you can make them use it for any time missed. We have vacation and short term disability, our ees do not have to use vacation time if they are out due to an illness/injury. They must use the STD benefit, if they have any. When that runs out, or if they reach 480 hours of STD benefits for one illness injury, they either return to work, or don't get paid. If THEY choose to use vacation time at that point, they made that decision. I think that most ees that fall into this scenario are out on FMLA and need the pay check, so they take it anyway. Since our Disability Leave, which gives an additional 12 weeks after FMLA for the ees OWN serious illness/injury is not paid, this is when our ees typically shoose to take the vacation time, or, in rare cases, this is when LTD benefits kick in, if the ee chose to participate in LTD coverage. One way that we have kept this arrangement from being abused is that the ee has to work and be on active status to accrue additional vacation time (the end of every month), so it keeps them from earning additional vacation time, which would give them more time off later in the year.
  • If I remember right, mushroom, isn't your disability self-funded? My guess is you're looking at this a little like FMLA, so you don't have them come back from 26 weeks disability and go on a four week cruise using their accrued vacation. Our disability plan has a waiting period (15 calendar days, I think) during which time we allow EEs to use vacation if they choose, but we do not require it. Anyway, we've only had two people out on disability that I know of, so it doesn't come up very often for us.

    I can't think of a reason to not do it, but hopefully someone else will chime in. Then again, it seems like double-dipping to get disability and vacation concurrently. Does the vacation "convert" to disability - they're paid $X amount either way, but instead of coming out of your disability pot (so to speak), it comes out of the vacation pot?
  • Our intent was to have the employee use their vacation as part of the 26 weeks of disability; for instance, 2 weeks of vacation pay then 12 weeks of disability pay for a total of 14 weeks off work. At the end of their disability they would have no vacation time remaining if that is how it would work out. Yes, this would prevent someone from taking 26 weeks of disability and then going on a cruise for 4 weeks, (or whatever vacation time they have left). And we are self-funded. We do have a lot of people who go out on disability then later on in the year, they use their vacation. It seems like they are gone more than at work. And we also don't terminate at the end of FML. Thanks for all of your input.
  • We used to require employees to use any PTO before going into a leave-without-pay status, but after implementing a new STD policy, we decided to let employees decide whether to use sick or annual leave during the waiting period (5 days).

    Because STD benefits are taxable and therefore complimentary to paid time off, we also allow employees to choose whether to use any accrued paid leave to supplement disability income to bring their income back up to 100%. The insurance company really frowns on that ("it disincents employees from returning to work").
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