Hi Everyone - One of our members has asked me to post this anonymously…
For all of you Model A sponsors who have had projects with employees separate/spin-out to a standalone 501(c)(3), how do you handle PTO balances that need to be paid out? Do you:
A) Pay out the balance to the employees just as you would for any other terminated employee
B) Transfer the balances (and accumulated vacation time) over to their new entity -- and not pay out anything to the employees (except for their last paycheck)
C) Allow the project leader(s) to choose option A or option B
D) Something else (please explain)
Thanks!
Bonus Question: Have you ever come across an instance where an employee has “purchased” additional PTO — literally written a check to the organization? (For example, if the fiscal sponsor paid out the PTO when the project departed but one or more employees wanted build their balances back up quickly.) I’ve never come across this before —and have to imagine there are good reasons why this doesn’t happen — but I’m not sure what those reasons are.