Curious about what a leave sharing scheme is and how it works? Getting familiar with HR policy can be difficult when there is such a variety of regulations to work through, but mastering the basics is essential nonetheless.
There are many forms of leave policies that organizations experiment with, employing a combination of them in different scenarios to allow employees time away from work accordingly. Sick leaves and paid time off are the most common examples of a leave policy, with the former a mandatory offering in most workplaces. Unfortunately, emergency scenarios don’t always fall into neatly planned calendar days and come unexpectedly for employees, forcing many to quit or take extended, unpaid breaks to attend to matters.
A leave sharing scheme is a workplace offering that allows employees to donate their accrued paid leave days to their colleagues during such times, supporting one another during their time of need.
A leave sharing scheme is a great way for employees to support each other during their time of need, using accrued leave as a donatable resource. (Image: Pexels)
Back to the Basics of HR: What is a Leave Sharing Scheme?
A leave sharing plan or a voluntary leave transfer program is a policy that allows employees to gather and transfer their paid leave days to another colleague during their time of need. Depending on how it is set up, employees can either transfer their paid leave days directly to an employee who needs them or contribute their paid leave to a “leave bank” for use by other employees as and when they need it. Such a system of voluntary leave transfers enables employees to support one another in times of need, fostering a sense of community in the workplace.
Such policies were particularly beneficial during the COVID-19 pandemic, when unexpected illness was fairly common and the need for time off from work unpredictable. IRS Notice 2006-59 even set up a more formalized guideline regarding the sharing of leave and how this would affect income tax filings. The US Office of Personnel Management similarly has guidelines in place for how agencies can administer such leave policies for medical emergencies, making this a very legitimate way for employees to show support.
What Are the Benefits of an Employee Leave Donation Program?
In an ideal scenario, employers should be well-placed to offer employees extended leave options themselves to ensure that employees can recover from their illness or care for a loved one without the pressure of losing their jobs or their income. Unfortunately, such practices are not always seen as practical by organizations, which leaves us to explore alternative measures that still ensure that employees are supported during their time of need. There are many benefits to such leave sharing plans:
- Allows employees who need such support to seek it out during difficult periods, ensuring that they do not eat into their wages while they’re away
- Creates a support structure within the workplace where employees can look out for each other
- Fosters a sense of community and encourages employees to operate as a team even outside of the leave sharing scheme, as employees who benefit from the program usually have a genuine desire to give back to their colleagues when they can
- It extends the benefits that employers provide and adds an avenue of additional support that colleagues can offer
What Are Some Considerations to Keep in Mind When Setting up a Leave Sharing Scheme?
There is considerable planning that goes into determining whether a leave sharing program is right for your organization. Not all organizations are set up in a way that is conducive to such a program, especially when leaves are offered on a very limited basis, which makes it hard to share.
If existing plans and benefits don’t create avenues for employees to share their PTO days, efforts to set such a program up might not be fruitful or may require employers to address those changes first before creating such leave transfer programs. If, having assessed the organizational fit, you determine that this is the right direction for your business, then there are some things to keep in mind.
Key points to consider:
- Determine how employees will be allowed to share their leave, and where the records of shared leave will be maintained for later use
- Establish the eligibility criteria for using the leave, and whether there will be limits on using the leave transfer program
- Explain how the leave sharing program will be used and what happens to unused donated leave days
- Write down the policy and ensure all aspects are explained clearly for employees to understand
- Establish clear points of contact so employees know who to approach with questions, concerns, or their desire to fall back on the policy
- Clarify any benefits of contributing to the donated leave program, and ensure that employees are aware of any tax advantages or repercussions of doing so
A voluntary leave transfer program may ultimately never be used if employees are treated to a generous PTO policy and other leave benefits at work, but it doesn’t hurt to have the right systems in place is extreme, unpredictable cases of medical emergencies or natural disasters, when employees may appreciate a way to help each other out. It is a useful management tool, and while it may require some effort to set up, the benefits are multifold when it is used.
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