Short-term disability benefits replace a portion of an hourly employee’s income when they are temporarily unable to work due to illness or injury. The calculation typically involves determining the employee’s average weekly wage based on recent pay periods. A percentage of this average weekly wage, often between 50% and 70%, is then paid out as the weekly short-term disability benefit, subject to a maximum benefit amount. For example, if an employee’s average weekly wage is $600 and the short-term disability plan pays 60%, the weekly benefit would be $360, provided this amount falls within the plan’s limits.
Access to income replacement during periods of incapacitation provides crucial financial stability for hourly workers, preventing significant economic hardship during recovery. Historically, short-term disability coverage was less common for hourly employees, but increasing awareness of its importance has led to wider adoption, improving overall worker security and potentially reducing employee turnover for employers offering this benefit. It supports employee well-being, which in turn, can positively impact productivity when the employee returns to work.
