Ask an HR Expert: Can We Allow Employees to Donate PTO to Co-Workers Who Have Had Family Emergencies?

Leave-sharing programs can be a great resource for people facing urgent situations.

By Patricia Graves, SHRM-SCP October 27, 2017
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​Yes, as long as the emergency falls within the IRS definitions below.

Medical emergency: a medical condition of an employee or a family member that would lead to the worker’s absence from work for an extended length of time and cause a substantial loss of income.

Major disaster: as declared by the president, an event that warrants individual or public assistance from the federal government, or has severe adverse effects on a substantial number of employees.

PTO donation or leave-sharing policies can be great resources for people facing urgent situations. When designing your company’s program, outline the process for giving and receiving leave and the criteria for eligibility to participate. Also, set up a PTO donation “bank” and a process for tracking the time off. This will ensure that donated leave is available to all qualifying workers. Make sure to establish a policy prohibiting discrimination or unfair treatment.

Before deciding if leave-sharing or PTO donations are right for your organization, know about the associated costs. Work with your finance department to budget for these programs and estimate outlays for the calendar year. Leave-sharing may be administratively burdensome, and unused donated leave at the end of the year may become a liability by increasing your company’s payroll expenses. You may also experience several natural disasters within a single year, causing an increased need for donated leave and more expense for the company.

Workers donating leave may receive a higher or lower hourly rate of pay than the employees receiving the transferred time. That’s an issue you’ll need to address. For example, when someone receives leave from a worker with a different rate of pay, the donated time should be converted to reflect the recipient’s compensation rate. For example, if a donor who earns $20 per hour surrenders eight hours of paid leave to someone earning $10 per hour, the receiving worker should get 16 hours of paid leave.

Even with the potential concerns outlined above, leave-sharing programs are an excellent way for employees to genuinely help their fellow co-workers while fostering camaraderie among those facing family emergencies or disasters.

—Patricia Graves, SHRM-SCP, is a SHRM HR Knowledge Center advisor.

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