What is a "major disaster leave-sharing plan?"

A major disaster leave-sharing plan is a written plan meeting a number of requirements. Those requirements are spelled out in a guidance issued by the Internal Revenue Service (IRS Notice 2006-59, I.R.B. 2006-28, June 19, 2006). Among the requirements are the following:

• Under the plan, an employee is considered to be adversely affected by a major disaster if the disaster has caused severe hardship to the employee or a family member of the employee that requires the employee to be absent from work.
• The plan does not allow a leave donor to deposit leave for transfer to a specific leave recipient.
• The amount of leave that a leave donor may donate in any year generally may not exceed the maximum amount of leave that an employee normally accrues during the year.
• The plan adopts a reasonable limit, based on the severity of the disaster, on the period of time after the major disaster during which a leave donor may deposit the leave and a leave recipient must use the leave.
• A leave recipient may not convert leave received under the plan into cash. But a leave recipient may use leave received under the plan to eliminate a negative leave balance caused by a major disaster.
• Leave deposited on account of one major disaster may be used only for employees affected by that major disaster.

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