Does anyone know how the donated leave program is supposed to work?

[JJD]

Suppose Joe has no accrued PTO, gets 2 weeks in a year from his employer, and decides he wants to donate this.

Does Joe work for 52 weeks, get paid 52 weeks of comp., with the employer paying 54 weeks of comp. in all--52 to Joe and 2 to Katrina victims?

Does Joe work for 50 weeks, get paid 50 weeks of comp., and take 2 wks. unpaid leave, with the employer paying its normal 52 weeks of comp., but with 2 of it now going to Katrina?

Does it matter--will either scenario work?

Are there other alternatives? Suppose Joe works for 51 weeks and takes one week of unpaid leave? Do the Katrina victims still get 2 wks. of comp. from Joe's employer?

Thank you.

[Guest hyper]

JohnD: I have been fussing with the issue all morning. I called the IRS contact person provided at the end of Notice 2005-68 and his message says he is in "temporary quarters" for 2 months and has a large quantity of calls on this issue, so I do not look forward to a quick response.

I think: If the EE has a "bank" of paid time off (PTO), the ER can reduce the PTO bank balance and generally net a 0 ER cost for the contribution to Katrina (assuming the ER had an obligation to pay the PTO time and it was not a "use it or loose it" policy)

If there is not a PTO "bank", the ER must pony up the extra cost for the donation. In your example, Joe donates 2 weeks vacation to Katrina. Joe's ER would pay Joe 52 wks of pay for the year and also pay 2 weeks pay to Katrina, which equals 54 weeks of pay.

Any other ideas !!!! Ferris ?