Sick Leave Direct Donation

House Bill 1771 authorizes state employees to voluntarily donate (transfer) sick leave to another state employee within the same agency.  A sick leave direct donation should not be confused with a donation of sick leave to the sick leave pool.

The direct donation is another paid leave option to assist those who have exhausted their available sick leave and allow them to recover from an illness or injury.  This option is also available to care for eligible family members.

System Regulation 31.06.02 Sick Leave Donation

Sick Leave Donors

A donor may donate any amount of available sick leave to an eligible recipient. A donor is not required to be in a leave-accruing position at the time a donation is made, but will need to have sufficient hours to cover the donation. Unused donated sick leave hours will not be returned to the donor.

Tax Considerations for Sick Leave Donors

Pursuant to IRS guidelines, if a donation is determined to qualify as a medical emergency,  the donation will be considered tax-exempt.

If the donation is determined not to qualify as a medical emergency pursuant to IRS guidelines, then the donation will be considered subject to taxation.  The cash value of donated sick leave in this situation is includable in the donor’s gross income and will be treated as wages for employment tax purposes with such wages being considered a lump-sum payment, subject to 25% income tax, Medicare, and applicable social security withholdings.

For sick leave donation purposes, a medical emergency is defined as “a major illness or other medical condition that requires a prolonged absence from work (40 hours), including intermittent absences that are related to the same illness or condition”.

Recipients of Donated Sick Leave

Employees may use donated hours for several reason, including:

  • During the 80-hour waiting period for sick leave pool purposes
  • After the employee has exhausted sick leave pool benefit
  • For less catastrophic conditions which do not rise to the level of the need for sick leave pool hours

Employees may receive donated sick leave hours if

  • They are in the same (TAMUS member) as the donor

  • They have exhausted all sick leave accruals (employee has earned)

  • They have exhausted all sick leave pool hours they are eligible for

  • They have exhausted any previously donated hours they received  (In the event the employee has been out for 80 hours, they must apply for sick leave pool before receiving donated hours.)

  • They have a balance in annual leave

Donated sick leave will be used in accordance with sick leave regulations (System Policy 31.03.02), with the exception that the donated hours cannot be used for retirement credit.  

Once donated sick leave may not be paid to the estate, donated to sick leave pool, or transferred to another employee, or have unused donated hours returned.

Donation Process

Donations will be processed using the following forms:

An employee who wishes to donate sick leave to another employee will complete the Sick Leave Direct Donation – Donor Form and submit the form to Engineering Human Resources.

The request will be reviewed to confirm eligibility.  Upon approval the Sick Leave Direct Donation – Recipient Form will be provided to the recipient with the request for medical certification to determine medical emergency.

Notification of approved sick leave donations will be issued to both the donor and the recipient.

Additional Information

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