HR Question of the Month
Holiday Party HR Q & A
The employer has direct and vicarious liability to any incidents that may occur when serving alcohol. This can expand from personal injury to criminal acts, for example, driving while intoxicated or assault.
Are there tax or IRS implications if we choose to offer our employees a gift certificate or gift card?
According to the IRS, cash or “cash equivalents” (such as gift cards) are always taxable. However, you can exclude the value of a de minimis benefit you provide to an employee. If you offer the employee a different type of recognition reward (such as a dinner out or tickets to an event), it may not be taxable. While the IRS doesn’t specifically put a dollar value on what constitutes “de minimis,” the definition of a de minimis benefit is “any property or service you provide to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administratively impracticable. Cash and cash equivalent fringe benefits (for example, use of gift card, charge card, or credit card), no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation fare.” For more information, the IRS Publication 15-B Employer’s Tax Guide to Fringe Benefits for 2016 offers a chart that shows the tax excludable value of some fringe benefits.
If we have a voluntary event and provide taxi vouchers to/from the event but the employee declines the taxi and is in a car accident, who is liable?
Besides the employee who caused the accident, the court would assign responsibility for the employer’s part in providing alcohol to the employee based on the facts of the situation. Specifically, if the employer-sponsored event had witnesses that company representatives offered the employee a taxi voucher or other safer method of transport from the party that the employee declined, this could mitigate the employer’s risk. The court could also still assign some responsibility to the employer because the employer knew the employee was impaired, had declined the employer’s options for safer transportation, and still allowed the employee to leave the party.
To mitigate company risk, a company manager should meet with the intoxicated employee privately, explain that there is no judgment and the company cares about him and wants him to be safe. Don’t take “no” for an answer and simply call the taxi.