Navigating Gift Policies and Laws: A Complete Guide to Ethical Corporate Gift Giving

Transparency and ethics are very important in the business world. This has been especially true over the recent decades, as companies and organizations have introduced gift-giving policies at the corporate level. Additionally, specific sectors and industries like financial services, media, pharmaceuticals, and technology have implemented stricter policies covering both gift-giving and entertainment.

Generally, these are known as entertainment and gift policies. Corporate gift policy limits and policies are in place to help ensure that each organization complies with anti-bribery laws.

An Overview of Gifts and Entertainment (G&E) Policies

A comprehensive G&E policy can help encourage ethical business relationships, provide guidelines for employees and business partners, and help promote consistency.

Gift policy should apply to all of the employees in the organization, from entry-level workers to the CEO. If the corporate gift policy does not apply to everyone, it can adversely affect morale and lead employees to ignore company regulations.

Key Topics That Need to Be Addressed in Your G&E Policy

The organization’s gifts and entertainment policy should specify dollar limits for entertainment and gifts. The policy should state the legal requirements for a gift. Typically, gifts are defined as things of value while entertainment would include events like sporting events, dinners, and performances.

Policies should have annual as well as one-time limits and should prohibit gifts of cash and cash equivalents such as gift cards. The policy should also specifically state that family members of an employee are covered by the same limits. The timing of gifts is also important. Gifts or entertainment from possible business partners should be prohibited during contract negotiations, the bidding process or during vendor evaluations.

Entertainment and gifts given to federal employees or public officials are highly regulated. Legal or compliance should approve G&E to public officials in advance, and all reporting obligations should be followed. Business gift giving to public officials in foreign countries falls under the Foreign Corrupt Practices Act; violations can result in substantial penalties. Business gift-giving policies should specify contacts and resources available to employees with questions about the policy.

Understanding the Difference Between Kickbacks and Vendor Gifts

One key gift policy example to cover is related to the federal Anti-Kickback statute. If a supplier’s or vendor’s goods or services are paid for by the federal government under the auspices of a federal healthcare program, accepting gifts or premiums could be classified as a federal crime.

If anyone knowingly receives or solicits remuneration, they could be guilty of a felony. Similarly, someone paying remuneration in return for a facility’s business may also be committing a felony. Although “bad intent” is required for a felony, in this case, corporate gift-giving laws and rules should prohibit giving or receiving anything of value. Individual states may also have their own form of anti-kickback laws.

What Gifts May Be Generally Acceptable?

If you are the recipient of a gift, you have to understand company policies and state gift laws. You can check with your corporate counsel, or with HR or finance to find out exactly what policies may apply to you.

Generally, meals and perishable gifts are acceptable. Lower-value items with a company logo are also allowed. The organization’s gift policies will often state that employees are prohibited from giving gifts to government officials or any other individuals where the gift could be construed as a bribe. Gifts that are very lavish or have high value, or gifts of multiple quantities would also be disallowed.

Companies and organizations should be sure to emphasize business ethics and G&E policies, especially around the holidays. It’s important to avoid any hint of impropriety and to be sure not to provide remuneration or gifts to public officials. All levels of the organization, from workers to the CEO, should be covered by the G&E policies.