As we approach Christmas, end of year gifts and bonuses in the workplace become a common occurrence.
Festive bonuses can boost morale and are a great opportunity to show appreciation to your valued staff. However, when mismanaged, they can create issues for employers, so here are a few tips to ensure that Christmas gift-giving, bonuses and incentives strike the right balance.
Distribution of Gifts
While gifts can be discretionary, employers must not use any unlawful or discriminatory criteria when deciding who will and won't receive a gift.
In the recent Federal Court decision Rumble v Partnership t/as HWL Ebsworth Lawyers [2019] FCA 1409, Dr Rumble, a senior lawyer, alleged that HWL Ebsworth breached his general protections by discriminating against him on the basis of his political opinion. He argued that one instance of discrimination was the employer not giving him a gift card which was given to other employees as a Christmas gift. Dr Rumble was ultimately unsuccessful as he was a casual employee and casual employees did not receive gifts from the employer.
Consider the Taxation Implications
According to the ATO, the provision of a gift to an employee of more than $300 value means that employee must pay Fringe Benefits Tax on the item.
Certain gifts can also be tax deductible for the employer, but entertainment gifts such as movie and sporting tickets, holidays or club memberships are not tax deductible.
Choose the Right Gifts
Consider buying ethical gifts for your employees. Think about where the product is made and what the working conditions are like. Consider the amount of packaging and shipping required, ask what the environmental impact of your purchase will be.
Always remember to keep your gifts appropriate for the workplace. For example, lingerie and handcuffs are not appropriate gifts for an employee and will likely amount to sexual harassment: Kraus v Menzie [2012] FCA 3.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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