Leave-Sharing Plan

DEFINITION of 'Leave-Sharing Plan'

A plan that allows employees to donate unused sick-leave time to a charitable pool, from which employees who need more sick leave than they are normally allotted may draw. Leave-sharing plans are designed to aid employees who face major surgeries or other medical emergencies or who live in areas affected by natural disasters, such as flooding. These plans contain many provisions that can vary from one employer to another.

BREAKING DOWN 'Leave-Sharing Plan'

Employees who benefit from the additional leave time are taxed for the equivalent compensation that they receive as W-2 income. Employers who offer this type of plan must consider several factors, such as whether employees can choose who they donate their sick time to and whether they should limit the amount or percent of sick leave that can be donated.

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