This is a policy that a company can use to establish when short term and long term
disability benefits will be granted. Several factors can determine whether an employee
will be entitled to short term or long term disability benefits. These customizable factors
include: full time or part time employment, length of continuous employment, type of
disability, company approval, and the type of benefits granted. This policy can be used
by small businesses or other entities that want to establish a consistent and uniform
disability policy for their employees.
Sample Long – and Short – Term Disability Policy
SAMPLE LONG - AND SHORT-TERM DISABILITY POLICY
SHORT TERM DISABILITY POLICY
1. ________________ (the “Company”) has in place a Short-Term Disability Policy (the
“Policy”) which is designed and available for its employees who are eligible full time employees
of the Company. The Policy was implemented by the Company to provide assistance to the
Company’s employees who may at one time or another is unable to work due to short term
illness or disability lasting up to _______ (___) months.
2. A full time employee of the Company shall be eligible for use of the Policy provided
such full time employee has been employed for a continuous period of ______ (___) or more
years with the Company.
3. The Policy shall be incorporated with the Company’s existing Long-Term Disability
Policy (“Long-Term Disability Policy”) which provides assistance to the Company’s employees
who may at one time or another is unable to work due to long term illness or disability last upon
to _________ (__) year(s).
4. Any illness or disability claimed by an employee of the Company shall be confirmed in
writing by the employee’s family physician or a specialist stating the illness or disability and the
expected return date to work.
5. Any claim by a full time employee for use of the Policy shall be approved by the
6. The Company retains and reserves the right to request additional information from the
employee or the employee’s family physician and/or to request the employee to obtain
certification of the illness/disability from a physician of the Company’s choice at the Company’s
expense prior to granting approval of use of the Policy.
7. Any and all requests by employees to use the Policy shall be submitted to
8. Upon an employee being granted the use of the Policy by the Company, the Company
shall have the right to request that the employee’s family physician provide an updated to the
Company upon request of the status of the employee’s illness and disability.
9. Any benefits to be paid under the Policy shall commence _____________________.
10. The maximum benefits to be paid to any full time employee under the Policy are
_______ (___) working days at full pay or a combination of full and half pay totaling _______
(___) working days, after which time a determination may be made regarding an employee’s
eligibility for company paid Long-Term Disability benefits.
11. The benefits to be paid out to an employee under the Policy shall be paid in accordance
with the following schedule:
(enter schedule of payments to be made and dates)
12. The Company shall base the calculation of the benefits to which the employee is entitled
(i) _____ (___%) percent of the total income of the prior 24 months divided by 52 bi-weekly
periods (or, if newly eligible, the prior 12 months divided by 26) to determine the average bi-
weekly paycheck; or
(ii) _______ (___%) percent of the true total annual earnings divided by 26 to determine the
bi-weekly paycheck, whichever is greater.
13. At the expiry of the _______ (___) month period of the employee being ill or disable, the
Company shall request an assessment to determine whether an employee is eligible for Long-
Term Disability benefits. If at that time, the employee cannot be certified disabled by the
Long-Term Disability plan administrator, his or her employment may be terminated with the
option for rehire when the employee’s health allows.
14. In the event an employee is or become pregnant, that shall be considered as an illness or
disability under the Policy. Such employee who is or becomes pregnant and is unable to work,
such benefits to be paid to the employee under the Policy must be based on actual disability of
the individual, not the mere fact of pregnancy.
15. In the event the Company discovers a false or fake claim for benefits to be paid under the
Policy, or if an employee fails to report to work on the first regularly scheduled workday
following absence under the Policy, he/she will be subject to disciplinary action up to and
including termination of employment.
16. Any benefits paid to an employee under the Policy shall exceed the salary of the
17. Upon an employee receiving benefits under the Policy, the Company has the right to fill
the employee’s position within the Company. Upon an employee returning to work, the
Company shall use its reasonable best efforts to return the employee to the position formerly
held or to one of similar responsibility and salary level.
18. This Policy is subject to amendments from time to time.
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1. The employee shall be liable and responsible for completing the required documentation
from his or her family physician.
2. ______________ shall be responsible for the monitor and calculating of the benefits to be
paid to an employee under the Policy.
3. ___________________ shall be responsible for approving payment of benefits under this
4. The employee is responsible for submitting copies of all pay stubs and documentation of
payments of all benefits to ___________________ within ____ (__) days of receipt of last
LONG-TERM DISABILITY POLICY
1. Any employee of the Company who is unable to work due to illness or disability that last
longer than __________ (___) continuous work day may be eligible for benefits to be paid to
them under the Company’s Long-Term Disability Policy (“Long-Term Disability Policy”).
2. The Long-Term Disability Policy of the Company was implemented on the ___ day of
3. Eligible employees of the Company who are determined to be eligible for the Long-Term
Disability Policy shall receive a benefit equal to ________ (____%) percent of basic monthly
compensation as defined in the Policy.
4. Long-Term Disability payments and benefits may continue for up to ______ (___)
5. (Enter summary of the description of the Long-Term Disability Policy here).
6. An employee’s participation in the Company’s Long-Term Disability Policy shall be
terminated upon the employee ceasing to be an employee of the Company or upon an
employee’s retirement from the Company or in the event the Company cancels its Long-Term
7. Participation in the Company’s Long-Term Disability Policy shall not prevent or limit the
Company from having the right to terminate any employee participating in the Long-Term
Disability Policy nor does it give any employee the right to continued employment.
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8. An employee shall be eligible to receive benefits under the Company’s Long-Term
Disability Policy provided the employee has been ill or disable for a period of __________ (___)
continuous working days and such illness or disability has been properly documented by the
employee’s family physician or specialist.
9. In the event an employee returns to his or her work after being paid Long-Term
Disability benefits and becomes disabled due to the same or related problems within _____ (__)
months following his or her return to work with the Company, the employee shall not be
required to complete an additional qualifying period.
10. An employee shall not be eligible for the Company’s Long-Term Disability Policy
benefits if the employee’s disability or illness resulted from the employee intentionally causing
such illness or disability or participation in a felony or as a result of such participation.
11. Any and all claims by an employee for the Company’s Long-Term Disability Policy
benefits shall be submitted to _____________________, the Claims Administration.
12. The employee shall complete all required and necessary form for his or her claim for the
Company’s Long-Term Disability Policy benefits and submit same to the appropriate party.
13. To qualify for benefits, the employee’s claim for such benefits shall be supported by
current medical documentation. An employee claiming such benefits must be in the continuous
care of a qualified physician under a course of treatment appropriate for the disability or illness.
14. An employee may be asked to undergo a medical examination by a physician designated
by the Company and any such request shall be paid for by the Company.
15. Any continuous Long-Term Disability Policy benefits payments will require ongoing
certification of disability based on updated medical documentation. Frequency of claim review
is determined by the Claims Administrator for the Company.
16. The Company shall base the calculation of the Long-Term Disability Policy benefits to
which the employee is entitled as follows:
(a) ________ (___%) percent of the base monthly compensation minus other disability
income, with base monthly compensation defined in as follows:
(i) (enter definition of base monthly compensation here)
17. The minimum Long-Term Disability Policy benefit which may be paid to an employee is
_____________ ($_____) Dollars per month.
18. Any payments of Long-Term Disability Policy benefits commence on the ______ day of
the month following the first day of Long-Term Disability by an employee.
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19. Thereafter, payments are made on the _______ of each and every month to cover all or
part of the preceding month during which an employee is deemed and certified disabled.
20. With the exception of mental or nervous disorders, alcoholism or drug abuse, when all of
the Company’s Long-Term Disability Policy conditions are met, the benefits shall continue for
up to ________ (___) months in the event an employee is unable to perform the material duties
of his or her daily job.
21. Long-Term Disability Policy benefits shall be terminated upon the employee recovering
from his or disability, the employee’s failure to remain under the regular care and treatment of a
qualified physician, the employee return to his or her employment with the Company, an
employee’s inability or unwillingness to provide complete medical evidence of his or total
disability and the expiration of the payment period is determined under the following schedule:
22. In the event an employee disagrees with a decision regarding the benefits to which his or
her is entitled, the employee shall have _______ (___) days in which to file a written appeal with
the Company’s Claim Administrator. Within ______ (___) days, an employee’s claim will be
reviewed and the employee will receive a written decision regarding his or her appeal.
23. _____________________ shall administer the Company’s Long-Term Disability Policy.
24. The Company’s Long-Term Disability Policy may be amended at any time.
25. The Company has the right and reserves the right to terminate its Long-Term Disability
Policy at any time and for any reason whatsoever.
Department of Labor Plan Number:
Type of Policy:
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