Catastrophic Illness Donation Questions
1. Who initiates the catastrophic illness donation process?
The employee should make a request to participate in the process, however, the agency should ensure that the employee is aware of the program and the eligibility criteria. Also, some employees may not wish to have other employees solicited for donations. Or, some employees may be eligible for long term disability benefits, and would have no need for donated leave.
2. How are donations solicited? (memo, bulletin board, newsletter, e-mail)
Via memo/donation form.
3. Should donations be anonymous?
Yes. While some employees would like to thank donors, employees shouldn’t feel obligated to donate leave (to supervisors, for example).
4. Can leave donations be used retroactively for previous unpaid absence?
No. There is no fair dividing line on how far back to go. Catastrophic illness donations should be limited to future use.
5. What happens if the recipient retires?
Recipient would be paid for one quarter of his/her sick leave balance.
6. Are temporaries eligible for catastrophic illness donations?
Since the labor contract doesn’t cover temporaries, no, and temporaries do not have leave benefits.
7. Is there a minimum period the employee would be expected to miss (i.e., one week) before catastrophic illness donations are requested?
No. Return to work dates can be difficult to predict.
8. How does long term disability or worker’s compensation interact with catastrophic illness donation?
Donated leave does not change benefit eligibility dates, but long term disability benefit amounts are reduced by the dollar amount of donated leave used. For employees on worker’s compensation, the worker’s compensation benefit is equivalent to two-thirds of the worker’s regular salary. Donated leave not amounting to more than one-third of the worker’s regular salary, may be used to supplement the worker’s compensation payments.
9. Who incurs the tax liability for the leave donation?
Employees donating vacation/compensatory leave would incur no tax liability. Employees receiving donated leave would incur a tax liability at the time the leave was actually paid. It then becomes wages for employment tax purposes.
10. Can an agency start requesting donations for an employee who has not exhausted leave or met the month’s absence requirement when you have a doctor’s statement indicating that the employee will be off work over 30 days and you know they will exhaust their paid leave.
Yes. Once an agency knows that an employee will qualify for the program, they can begin the donation process prior to the leave being exhausted and before the thirty work day absence during the past six months has elapsed. Donated leave cannot actually be given to the employee until all eligibility conditions are met.
11. Should an agency accept donations in excess of the amount of leave they know will be needed for an employee? (Example: The employee’s doctor says they need to be out of work for eight weeks. Should you accept all donations for leave when it amounts to more than the required eight weeks?)
The answer to this question is really based on the circumstances of the request. When you have employees who you believe will return to work at the end of the initial period, it is advisable to accept donations only for that specific time period.
A suggestion from a State agency was to use donations in the order they are received. The agency date stamps each donation form and uses the donations with the earliest dates first. When they reach the amount of donations that are necessary to meet the request, they send out notification to the donors whose donations were not utilized thanking them for the donations, but letting them know that the request has been fulfilled and that their donations are being returned.
When you have information from a doctor which does not provide a return date and the circumstances indicate that the illness is so serious that the recuperation period is indefinite, you could accept large donations. One drawback to this method is that in the event the employee dies, the State has the obligation to pay out one-quarter of their sick leave account. Therefore, the donated leave is not utilized for its intended purpose, and employees providing this donation may be disillusioned with the program. Also, the amount of the sick leave payoff to which the employee is entitled would be inflated based on excess donations.
In situations where you are not sure of a return date, it maybe advisable to request donations for specific blocks of time, such as thirty or sixty day blocks, and if necessary, issue follow-up requests for donations.
It is highly recommended as the best practice, that in situations where you are not sure of a return date, to request donations for specific blocks of time, such as thirty or sixty day blocks, and if necessary, issue follow-up requests for donations.
12. What happens when donations are all received on the same day and we don’t need all of the donations received on that day to meet the request? How do we determine which donations to use, and which to return to the donor?
Agencies should use date/time stamping available on electronic mail, etc. to establish not only the date of the donation, but the actual time the donation was received. For any donations received later on the same day but not needed, agencies should send a notification letter telling the donor that their donation wasn’t needed at that time.
13. How should agencies handle donations that are solicited around the turn of the calendar year?
If donations are being solicited near the end of a calendar year, it is important that donations be solicited and fully transferred to the recipient or returned to the donor/s (if more than requested) prior to December 31st. This will prevent any year-end vacation balancing issues. If they are not finalized by that date there is the risk that a teammate will have leave time, time that was donated, forfeited due to end of year balancing. Then the donations would be pulled from their new, balanced bank, thus resulting in a double loss of leave time for the donating teammate (both the original amount of leave that has been forfeited and that taken for donations). Agencies should be proactive and pay close attention when donation situations could or will overlap with the turning of the calendar year so as to mitigate against this risk and structure the donation requests appropriately.
Please feel free to contact the AS Employee Relations Division (471-4104, 471-4106 or 471-8292) when you have questions regarding the administration of the catastrophic illness donation program.