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Background:
I've earned X (the market standard) as a senior software developer when I was healthy. After suffering an RSI-related health issue, I pursued a masters degree in Machine Learning and am on a path to recovery, but currently I can no longer do long hours. Approx. 6 or 7 hours is the max I can work per day, even if there's a deadline.

I'm presenting my RSI-related limited work hours to employers as a short-term or long-term disability. The current market standard pay for senior software developer is X+Y, and for machine learning engineer, it is X+Y+Z. I'm happy if I can at least get paid X, but companies that are willing to recruit me usually pay their normal engineers around 80% of X.

My question:
How do employers calculate how much they can pay an employee who has a short-term or long-term disability? Is there any official policy or guide? I'm asking this for jobs in India, but many companies in India have their branches in USA, Germany, Japan or South Korea, so a policy from any of those countries could also be borrowed. If a normal employee is paid X, do they reduce the pay by a certain percentage for a person with disability or do they try to pay the same and yet allow favorable working conditions based on the disability?

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    why would you possibly need to work more than 7 hours a day? huh?
    – Fattie
    Jul 13 at 12:21
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    This is an interesting question. I've always wondered how salaries and work hour concessions are determined for people with disabilities. Surely there would be thorough policies created for this. There is a sum deducted mentioned here: punarbhava.in/index.php/legal-instruments/…. Looks like 1 month's worth of salary gets reduced. I'd consider it an 8% or 10% reduction.
    – Julia
    Jul 13 at 12:47
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    It depends on jurisdiction. Regardless of where else the company has branches, the local regulation behind your contract takes precedence. If you're sitting in India, you have to check Indian law which is the bare minimum the company has to comply with, anything else is company-specific Jul 13 at 13:01
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    Can you clarify, when you say "burnout", do you mean extreme mental fatigue? How does the correlate with RSI? Jul 13 at 13:14
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    And is your 6-7 hour work day mandated by a doctor, or is that just what "feels right" for you? Jul 13 at 13:24
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I'm asking this for jobs in India, but many companies in India have their branches in USA, Germany, Japan or South Korea, so a policy from any of those countries could also be borrowed.

This is a US based answer.

How do employers calculate how much they can pay an employee who has a short-term or long-term disability? Is there any official policy or guide?

In the US the short-term disability, once demonstrated, would be covered by a company provided benefits. Depending on the corporation the employee would work what they could and the short-term disability coverage would provide the rest. There are of course limits on the amount of coverage and the length of that coverage. Not all employers provided this coverage, some make it optional, some provide it automatically.

The employee would then transition to the long-term disability. That has a separate clock, limits, and maximum coverage.

Existing paid time off could also be used to fill any gaps.

Once those policies came to an end, the employee/employer would have to come to an agreement of working schedule.

There would either be a minimum number of hours per week set by law or company policy that would have to be exceed to qualify for full benefits. If the employee falls below this threshold then they may not have access to paid time off, holiday pay, retirement program, insurance.

Their pay would also be proportionally reduced based on the number of hours they work.

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