Forums
Buy/Sell/Donate vacation hours amongst Employees
Benefits & Compensation
Buy/Sell/Donate vacation hours amongst Employees
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
We are evaluating if we can offer a volunteer vacation buy/sell/donate vacation hours for employees to employees. Many of the research we have found relate to buy/sell with the employer. It would be t
1
Cat:Topic ForumsForum:ForumId52
Cat:Topic ForumsForum:ForumId52Discussion:DiscussionId37015
Forums » Topic Forums » Benefits & Compensation » Buy/Sell/Donate vacation hours amongst Employees
|
Buy/Sell/Donate vacation hours amongst Employees
posted at 6/3/2011 5:54 AM EDT
|
Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
There is no way I would touch this plan with a 10 foot pole. And I worked for one of the big three HR consulting firms on very complex benefit plans and now do HR/payroll (and other things) for a group of companies. I would advise every client I have ever had to back away from this idea.
What you are proposing is not as simple as you seem to make it sound. There ARE tax issues. Unless it is under a Section 125, I don't see where you can get away with the transaction being taxable on BOTH employees -- which also means higher FICA for the employer, along with the higher/different hourly rate issue. As suggested above, you strongly need to get with a tax/benefits/ERISA attorney who could clarify it for you. And you are very blase about how someone in HR will touch this data and then you assume someone in payroll will program this correctly and input it correctly. But in all honestly, the more the data is touched/changed, the higher the chance of error. If I wanted to go down this path, the most I would do is to allow the employee to buy/sell time to/from the employer. There is NO WAY that I, the employer, would want to become a "middle man" in this transaction between two employees and I will honestly come right out and say you are foolish for doing so. You've now become party to something that increases your liability and risk. Because if you are wrong on taxation, you the employer will be liable from the IRS' point of view. If you are wrong from an ERISA point of view, that gets the DOL involved. Neither of those do I want anywhere near company records. And it is even possible at some point that a wage claim will be brought if it is not handled correctly. You are just opening yourself up to way too much liability. |
|
|
Buy/Sell/Donate vacation hours amongst Employees
posted at 6/3/2011 7:45 AM EDT
|
|
Posts: 4
First: 6/1/2011 Last: 6/3/2011 |
Thank you all for your comments and information. This sound much more complicated than originally proposed. If this is "illegal" in Canada, this definitely put a halt in the evaluation of such a plan since we have an office in Canada as well. |
|
|
Buy/Sell/Donate vacation hours amongst Employees
posted at 6/15/2011 9:16 AM EDT
|
|
Posts: 1
First: 6/15/2011 Last: 6/15/2011 |
Two words for you -- Constructive Receipt. You MUST work through your attorney on any plan involving PTO payouts. There are serious tax implications fo the person selling/donating the time, which usually take away any incentive for participating.
It's absolutely not as simple as anyone ever thinks it will be. |
|
|
Buy/Sell/Donate vacation hours amongst Employees
posted at 6/15/2011 9:20 AM EDT
|
|
Posts: 1
First: 6/15/2011 Last: 6/15/2011 |
From what I've learned regarding the donation of vacation time is that a committee must be formed to determine under what circumtances this can be done and to evaluate each time an employee wants to do this. Also, I don't believe this can be a pre-tax benefit. |
Forums » Topic Forums » Benefits & Compensation » Buy/Sell/Donate vacation hours amongst Employees
