By Frank Chmelik of Chmelik Sitkin & Davis P.S. – November 2018
Gift Baskets and Other Gifts. This time of year, port consultants like to deliver baskets of fruit, wine and cheese to their valued customers. Port employees and port commissioners can only accept “nominal gifts”, which are usually held to be less than $25, although your port district should have a policy on this. As to that basket, you can return it, you could donate it to a local charity for an auction, provide it as a door prize at an employee meeting or put it into the employee lunchroom for all to enjoy. The wine then needs to be returned, donated or given out as a door prize at an employee meeting. I might add that this same rule applies throughout the year for tickets to concerts or sporting events. One has to only imagine how attending a sporting event or receiving an expensive holiday gift from a port consultant would be explained in an open public meeting to understand the general rule.
Port Holiday Parties. Holiday parties can be a fun and productive way to bring employees together. However, port districts cannot pay for the holiday party. Some ports have “employee committees” that raise money to pay for events like a summer picnic or a holiday party. Ports can host “‘employee recognition events” or “all employee luncheons” to provide recognition to employees or groups of employees. At these events, the port can pay for the costs of the employee’s meals (but no alcohol).
Port Gifts to Employees. Ports can provide “nominal” (state law term) or “de minimis” (federal law term) gifts to employees for longevity or a particular accomplishment. A port logo hat, a port logo jacket or a plaque are considered “nominal”. The IRS rules (found in IRS Publication 15-B) note that gifts of cash or gift cards are never “de minimis” and therefore subject to tax.
Gift Exchanges. Sometimes port employees exchange holiday gifts. There are a couple of things to keep in mind here. First, any gift exchange should be voluntary and organized by employees and not as an official port event. Second, supervisors should not accept gifts from subordinate employees other than as part of a random gift exchange where names are drawn. Third, ports should ensure that any gifts are of nominal value and are of good taste. Fourth, remember that some holiday traditions do not resonate with all port employees’ backgrounds and religious beliefs – better a “holiday gift exchange” as opposed to a “secret Santa”. Remember, it is the port’s workplace, and the port retains a duty to its employees for that workplace. Here, a port policy goes a long way to clarifying these issues.
Holiday Events. By now you all are thinking “great – more prohibitions from the lawyers – bah humbug.” Point well taken. Over the years, I have seen many creative events organized by ports and port employees such as holiday concerts, food drives, ginger bread house competitions and senior port staff and commissioners cooking a holiday season breakfast for the port employees. So long as the value is “nominal” and participation is voluntary, holiday events can be a fun part of the season.
Holiday season activities, like most aspects of public employment, must be viewed from the perspective of the public, the perspective of other employees and preservation of the reputation of the port district in the community. In my experience it is rarely about a public employee looking for a benefit; rather, it is usually about a failure to fully consider how something could be perceived by other employees or the public.
From all of the staff and attorneys at our firm, we wish all of you a very happy holiday season.