How to avoid them? Keep these three concepts in mind:
1. Your holiday gifts and bonuses may be taxable:
“When an employer gives its employees holiday gifts or bonuses, it may be a taxable event subject to both income tax and payroll tax. According to the IRS, the term gift refers to a ‘detached and disinterested generosity.’ In contrast, it seems employers are providing the gifts either in appreciation of past performance or as an incentive for future performance. Many employers want to ‘thank’ the employees for their hard work throughout the year. From the IRS point-of-view, that is not a “detached and disinterested generosity.” (Davis Brown)
2. “Volunteering” your employees’ time? Pay ‘em:
“USDOL maintains that the FLSA does not allow employees to volunteer to their employer unpaid services which are the same as, similar to, or related to their normal duties. With limited exceptions, USDOL takes the same position even when an employee provides different services of a public-service or charitable nature that are done at the employer’s request, under its direction or control, or during the employee’s normal working hours.” (Fisher & Phillips)
3. Exercise caution when calculating FMLA over the holidays:
“For those employees who are on long-term FMLA, specifically if they take FMLA in week-long increments, the holiday or time off would normally count as FMLA day(s) and therefore be deducted from their FMLA bank. If the employee is taking intermittent leave in shorter increments, the holiday is FMLA leave only if the office is open and the employee would normally have been scheduled to work at that holiday time.” (Davis Brown)
- Employment Law Blog – Holiday Bonuses for Employees – Davis, Brown, Koehn, Shors & Roberts, P.C.
- Holiday “Volunteer” Services Might Be FLSA Employment – Fisher & Phillips LLP
- FMLA and Holiday Absences – Davis, Brown, Koehn, Shors & Roberts, P.C.
- Holiday Cheer with Less Legal Fear – Miller & Martin PLLC
- Holiday Warning: Cut Sexual Harassment From Your Holiday Party Invitation List – Armstrong Teasdale LLP
- Labor Letter, December 2012: Top Ten Ways To Hold A Company Party – Without Getting Sued – Fisher & Phillips LLP
- 3 Cheers for Holiday Parties! 5 Rules for Limiting Employer Liability!
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