Donating Sick Leave

[Guest Elaine Levin]

We are a 650 emp organization. We'd like to start a program that allows people to donate their accumulated sick days to people in need who may not have enough to carry them through to std. Anyone familar with this type of arrangement? What are the potential problems?

Thanks.

[Guest Charlie Stevens]

I have seen this type of policy before and it usually has a positive employee relations impact. It permits an employer to retain employees who can't work for extended periods of time and permits employees to come together as a team to help out fellow employees.

Disadvantages include handling the logistics of recordkeeping and communication so that employees know how much they have and how much they have donated. With the number of employees that you have it may be difficult to administer and may take more personhours than you would like. Also does the company take a position one way or the other as to whether employees are deserving of the donated leave. Legally, what if you would prefer to terminate an employee but your employees continue providing sick time. Good luck.

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Charlie Stevens

Michael Best & Friedrich LLP

[Guest nb]

We have a donated leave benefit. If an employee is on an LOA for over 30 days, other employees can donate leave balances, s/l or vac, to the individual. The hours are converted to $ based on the donating employee's hourly wages. The employee receiving the donation would receive their approximate "normal" wages as long as the funds last. Maintenance on the program is high, but the employee's think highly of the program.

[Guest Don Jones]

What are the tax implications of such a transfer for all three parties to this transaction? Would the tax implications be different if the time off plan was "dollars based" vs. "days based?"