Years of Service Rewards

Traceyd

I was thinking about implementing a Years of Service Reward for employees to recognize them for their years of service. I realize there are certain laws that we have to be cautious about and wanted to run this idea past the rest of you. I work in HR with an Illinois employer and wondered if it is legal to present an employee with a gift certificate at a local day-spa on the anniversary of their hire date?

Sharon McKnight SPHR

It's not illegal to give employees service awards, but there are some concerns. You should check with your payroll department and/or your accounting/finance department regarding how such gifts are taxed. Additionally, if the employees are non-exempt, there may be some issues with how the gift impacts their overtime payments.

The IRS offers some guidance here: [URL]http://www.irs.gov/publications/p15b/index.html[/URL] Look at the section on Achievement Awards.

Hope this helps.

Sharon

Traceyd

Sharon, Thank you for replying to my question. I know enough about this matter to know it just not plain and simple. I will take your advice and run this past the company that handles our payroll.

Again, Thank you!
Traceyd

Sharon McKnight SPHR

Another source for information about this is the companies that offer service award programs. To find them just Google Service Award Programs.

They are adept at setting up programs and manage the selection/distribution of awards as well as coordinate taxes, etc. with your payroll department.

Hope this helps.

Sharon