DOL’s recently issued new regular rate regulations went into effect on Januand are largely untested. The primary legal wage and hour issue is whether these $25 gift cards must be included in the regular rate of pay, and thus operate to boost up any overtime pay due the worker who receives such a “gift.” We suppose the answer to that question could also depend on the facts including the frequency of the payment, the criteria used to assign the gift cards, and whether the potential grant of gift cards is announced in advance, or held up as a carrot of sorts that can be eaten for doing certain levels of effort or work. But we are not tax attorneys and we don’t give tax advice. It is possibly not deemed to be a deductible business expense, at least in our understanding. The client didn’t ask us about the tax issue, but please be warned, we are concerned there may be no de minimis $25 or less rule for gift cards under the latest tax deduction rules. The short lawyerly answer is… it depends. Specifically, the employer wants to know whether there are wage and hour concerns arising from furnishing nonexempt employees a $25 gift card.
HOLIDAY GIFT CARDS FOR EMPLOYEES FREE
“ It’s the most wonderful time of the year.”Īn employer inquires whether they are free to give certain gifts or incentive awards to nonexempt workers.
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