Tax Laws & Employee Recognition Programs 2018
Explore the impact of 2018 tax laws on employee recognition and incentive programs, including details on non-taxable employee achievement awards, tax rules to be followed, and insights on Fair Labor Standards Act regarding overtime pay.
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Moderator: Brant Dolan, CPIM, Quality Incentive Company, IESP President Presenter: George Delta, Category Legal Council Expert 2018 Tax Laws & Effects on Recognition and Incentive Programs www.incentivemarketing.org
Moderator: Brant Dolan, CPIM, Quality Incentive Company, IESP President Presenter: George Delta, Category Legal Council Expert 2018 Tax Laws & Effects on Recognition and Incentive Programs www.incentivemarketing.org
Employee Achievement Awards Employee Achievement Awards Code Section 274(j) Code Section 274(j) General Guidelines Employers may take a business deduction for cost of employee achievement awards These awards are not taxable to the employee for income of FICA tax purposes Employee achievement awards = award covering safety achievement and/or length of service
Definition of Non-Taxable Employee Achievement Awards Item of tangible personal property (i.e., merchandise) Must be received as part of a meaningful presentation
Tax Rules for Employee Achievement Awards Cannot be given when making annual salary adjustments Average cost/employee for award cannot exceed $400 annually Deduction capability increases to $1600 if under an employer qualified plan Awards of nominal value : can be excluded
Questions? Tax Rules for Employee Achievement Awards
Questions? Fair Labor Standards Act FLSA & Overtime Pay
CA & Federal Labor Laws & Awards Programs: Is a Cash Alternative Required? Federal Law the FLSA does not prohibit merchandise-only reward & recognition plans regulates overtime & compensation/benefits used to calculate base rate CA Labor Law Differs
Questions? California Labor Laws
When is a bonus discretionary? Federal law defines discretionary bonuses as follows: The employer must retain discretion both as to the fact of payment and as to the amount until the time quite close to the end of the period for which the bonus is paid. The sum, if any, to be paid as a bonus, is determined by the employer without prior promise or agreement. The employee has no contract rights, express or implied, to any amount.
Questions? Bonus Discretionary
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Additional Questions? IMA & IESP: info@incentivemarketing.org George Delta: gdelta@deltalaw.net
