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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