Handling requests to transfer accrued sick leave

Q         We have an employee who has resigned and wants to donate her sick time to a coworker. Our policy states we will pay out vacation time but not sick leave. How should we handle sick leave transfers with all employees?

A   In Idaho, unless required under an employment contract or collective bargaining agreement, there’s no requirement to pay out any accrued sick leave when employees leave their employment. Thus, accrued vacation and sick leave are paid in accordance with an employer’s policy. Here, you aren’t required nor prohibited from transferring the sick leave.

Moving forward, if you do decide to allow employees to donate sick leave to another employee, you will need to consider limits to amounts of leave donated and received, eligibility requirements, and whether the leave donated is measured and transferred hour-to-hour or by pay rate differences. Also be aware that an employee’s decision to donate accrued sick leave may come with tax liabilities to both the donor and donee that you will want to disclose. The IRS does allow for exceptions, however, when employees are dealing with personal or family medical emergencies and for employees affected by a federally declared major disaster under a properly created, employer-sponsored arrangement.

Jason R. Mau is an attorney in the Boise office of Parsons Behle & Latimer. He can be reached at 208-562-4898 or jmau@parsonsbehle.com.