Spread a little (legally compliant) holiday cheer
It’s again that time of year to spread a little holiday cheer … and think about the potential legal consequences of doing so. Thinking about special ways to celebrate the season and thank your employees for their hard work? Here are some tips to avoid potential legal pitfalls.
Gift giving is traditional in many workplaces. While the exchange of gifts among coworkers has the potential to foster good will and teambuilding, it can also have the opposite effect. Employees therefore should be reminded to exercise good taste and to consider the organization’s anti-harassment policy when giving gifts in the workplace. After all, a gift card to Wawa is not likely to raise any eyebrows, but a gift card from Victoria’s Secret probably would.
In addition, employers and employees must ensure that any gift giving or receiving complies with company conflict of interest policies or codes of ethics. Furthermore, there could be tax consequences to employees depending on the value of any gift given by the employer. For example, gifts from the employer that are of nominal value (like a box of chocolates) do not need to be included in an employee’s income, but gifts of cash or a gift certificate or similar item that can be easily exchanged for cash would be considered additional wages to the employee. Finally, as with any human resources practice, employers should treat employees consistently and not give any group of employees preferential treatment.
Just as with the giving of gifts, employers must make sure that any bonuses are calculated and awarded in a non-discriminatory way and without preferential treatment to any category of employees. If your organization does award bonuses, it should be clear that the bonuses are discretionary. If they are not clearly discretionary, the bonuses will be considered wages under state wage payment laws, and perhaps more important, will be considered wages under the federal Fair Labor Standards Act. The result is that, to the extent that any non-exempt employee receives a non-discretionary bonus, the amount of the bonus recalculates the individual’s regular wage rate, and any overtime earned over the course of the year would need to be adjusted accordingly.
Employers should consult with experienced human resources professionals and/or labor and employment counsel with any questions regarding these issues. For MEA members, the Hotline and a Member Legal Services attorney are available to provide this assistance.
About the Author
Amy McAndrew is MEA’s Director of Member Legal Services and has over twenty years of experience as a labor and employment attorney.