The Professional Services Council (PSC) has requested that the Internal Revenue Service (IRS) allow employers to develop leave sharing programs to aid employees affected by Coronavirus Disease (COVID-19), the organization announced on Friday.
“The public health crisis as a result of the COVID-19 outbreak necessitates a review of IRS policies regarding donated leave for the private sector. Federal employees have access to voluntary leave banks and voluntary leave transfer programs,” said PSC executive vice president and Counsel Alan Chvotkin. “IRS should allow private-sector employers and their employees the same flexibility to minimize the impact of the COVID-19 virus on affected individuals.”
The request has asked the IRS to establish leave sharing programs as soon as possible, given the potential severity of the disruption COVID-19 may cause on the workforce. PSC’s goal is to see that employers and charitable organizations receive and deploy the full value of donated leave, rather than just the net after-tax amount.
Some companies have considered allowing employees to elect to donate vacation, sick, or personal leave either to give directly to fellow employees who have exhausted their accrued personal leave or in exchange for cash payments that the employer would make to qualified charitable organizations that would provide charitable relief. Under general tax rules, an employee who has elected to give donated leave is subject to tax withholding.
“The IRS has provided exceptions to this general rule for employers who offer leave-sharing plans for their employees who suffer medical emergencies or experience natural disasters. There may be other variations of these employee leave-sharing programs that IRS has implemented in the past and should be encouraged and that would benefit from the same tax treatment,” Chvotkin continued.
PSC is the voice of the government technology and professional services industry. PSC’s more than 400 member companies represent small, medium and large businesses that provide federal agencies with services of all kinds, including information technology, engineering, logistics, facilities management, operations and maintenance, consulting, international development, scientific, social, environmental services, and more. Together, the trade association’s members employ hundreds of thousands of Americans in all 50 states.