4.04.10: Employer-Sponsored STD (Short-Term Disability)
In order for short-term disability (STD) wages to be considered reportable compensation, all of the following criteria must be met:
- The payment must be for personal illness or injury as defined by your reporting unit’s short-term disability policy.
- Whether your reporting unit is self-insured for short-term disability or uses a third party, the short-term disability plan must be employer-sponsored to be reported as required with other compensation amounts. Copies of the following documentation prove employer sponsorship:
- The reporting unit’s official policy offering short-term disability to employees.
- Minutes from your reporting unit’s board meeting approving the short-term disability plan or policy.
- A collective bargaining agreement supporting a short-term disability plan.
- Employee benefits statement or booklet created by your reporting unit showing short-term disability plan as a benefit.
- You must withhold the usual payroll taxes and retirement contributions from the short-term disability payment to the employee including member contributions and tax-deferred payment amounts, if applicable.
Short-term disability wages should only be considered when calculating member and employer contributions on the DTL2 record. No part of STD wages are to be used when calculating member and employer contributions for Pension Plus, Pension Plus 2, Defined Contribution, Deferred Compensation, and Personal Healthcare Fund plans. STD wages should not be entered in the Employer Reported Wages field on a DTL4 record.
Please note: reportable and nonreportable “compensation” is defined in MCL 38.1303a and only applies to active MPSERS members. For information on reporting earnings for retirees please see section 9.01: Earnings of Retirees Who Return to Work.
Last updated: 02/01/2018