05/16/15 By Jennifer Brown

DonateTragedy happens to all of us – whether it is a death in the family, personal illness, natural disaster, or other circumstance out of our control. When eligible, employees can elect Family and Medical Leave or short/long-term disability; however, an employee may not be eligible for these types of leave or simply needs a few days here and there to fill in the gaps as they deal with their personal matter. One way a company can offer support to employees in need is through a PTO Donation Policy. With a PTO Donation Policy, employees are able to donate any unused PTO to a “leave bank” where other employees, who have exhausted their own PTO, may be eligible to receive extra time off. When crafting the policy, here are a few factors to consider:

Policy Verbiage
Make sure your policy clearly outlines eligibility requirements for both donating as well as requesting PTO from the leave bank. List any required documentation the employee requesting the PTO will need to provide (i.e., doctor’s note), and outline a general process employees must follow for both donating and requesting PTO from the leave bank.

State Requirements
The types of leave that an employee may donate can vary from state to state, since each state has different rules regarding leave. Make sure you know your state’s specific requirements. Visit your State’s Wage and Hour website to learn more about wage and hour guidelines as they pertain to your state.

Tax Implications
Generally, an employer-sponsored PTO Donation Policy will relieve both the employee who is donating the PTO and the employee who is requesting the PTO from any taxable income liability as long as the policy outlines specific bona fide reasons for the PTO (medical emergencies or natural disasters are usually covered). If PTO that has been donated or received does not meet this requirement, there could be tax implications for your employees. When you develop your policy, be sure to consult your accountant and/or the IRS website about these repercussions.

Offering a PTO Donation Policy can be a great benefit for your employees as it provides another option at their disposal when they are in a time of need. Likewise, it is yet another way to show your employees that you genuinely care about their well-being both inside and outside the office.


photo credit via Stuart Miles via Free Digital Photos