It’s the time of year that vendors try to spread holiday cheer, often in the form of gifts and entertainment. That means it’s also time to review corporate policies before accepting even the smallest gift, according to attorneys at Fisher-Phillips.
A gift or meal could be perceived as a bribe and therefore necessitate a clear gifts and entertainment policy, the firm’s experts say.
“An effective G&E policy can’t address every possible situation, but a well-drafted policy can promote consistency, encourage ethical business relationships, minimize potential concerns and provide guideposts for your employees — as well as your business partners,” wrote Fisher-Phillips partner Melissa A. Dials, in the firm’s Cleveland office, and Raymond W. Perez, of counsel in the firm’s Columbus, OH, and Washington, DC, offices.
The policy should be written to include employees on every rung of the corporate ladder, according to the attorneys.
“If top executives are allowed to receive gifts and entertainment that exceed the company limits, it can send the message that the ethical standards apply to all employees except the C-Suite executives,” they wrote. “This hurts morale and can lead employees to assume that it is acceptable to violate other company standards.”
Accepting invitations to special events generally is permissible, they said, as long as such events “are deemed commercially reasonable and the individuals are representing the company.” Beware, however, that some events might be inappropriate and violate anti-bribery laws, they added. Therefore, the attorneys said, it’s best to ask for approval by the company’s legal or compliance group before accepting.
According to Dials and Perez, a gifts and entertainment policy should cover:
- Dollar limits,
- Gifts to an employee’s family members and
- Timing — for instance, don’t accept gifts “during the bidding process, contract negotiations, during vendor evaluations or formal reviews.”
The policy should be included in a company handbook that is available to all employees, the attorneys said.
“It’s also a good practice to send annual reminders (i.e., during the holidays) to business partners regarding the company’s G&E policy and ask for their cooperation,” Dials and Perez advised.