From the Hotline: Short-Term Disability Benefits Reductions
Question: When should we notify employees on FMLA of reductions in their short-term disability benefits?
Answer: The rules surrounding maintaining FMLA benefits while the employee is on leave are specific to group health plans. For all other benefits, employers should follow their standard practice for notifying employees of their benefits entitlements. You know your employees, and if you have already been talking with them about the downsizing and how it will affect their jobs, then outlining how it will affect their benefits and giving them advance notification may be a good idea. If, however, you have historically continued other benefits during FMLA (such as STD), then you may want to continue your past practice and not make the change until the employees actually return to work in their reduced hours capacity.
Here are the FMLA regulations, § 825.209(5)(h),regarding maintenance of employee benefits: “An employee’s entitlement to benefits other than group health benefits during a period of FMLA leave (e.g. holiday pay) is to be determined by the employer’s established policy for providing such benefits when the employee is on other forms of leave (paid or unpaid, as appropriate).”