Currently, there is no federal law guaranteeing even one day of paid sick leave to workers, with the exception of federal contractors and government employees. There is the Family Medical Leave Act, but that simply provides the ability to take unpaid job-protected leave for specified family and medical reasons. There was an attempt back in 2016, where President Obama called on Congress to pass the Health Families Act which would have expanded sick leave to all private-sector workers, but it did not pass the House. Since that time, states and localities have taken action to provide all workers, within their…
Posts tagged as “PTO”
Paid Time Off, including Sick, Vacation, and the like policies, are an essential employee benefit, allowing workers to take time off while still receiving compensation. Many employers also offer PTO cash-out options where employees can receive payment for unused leave. However, these policies must be carefully structured to avoid unintended tax consequences under the IRS constructive receipt doctrine. If improperly designed, a PTO cash-out policy could result in employees being taxed on income they never actually received. This article explains how constructive receipt applies to PTO payouts and outlines strategies employers can use to structure PTO policies in a tax-compliant…