Category: ADMIN-FIN
POLICY & PROCEDURE
Subject:
Associate Recognition and Achievement Awards
Classification:
Management Approved
Policy Owner:
Chief Financial Officer
Senior Vice President, Human Resources
Approved by:
WFH President and CEO
POLICY:
Effective: October 1, 2008
Wheaton Franciscan Services, Inc. (d/b/a Wheaton Franciscan Healthcare –
“WFH”) organizations and associates must follow specific guidelines when
recognizing their fellow associates for an achievement in connection with his or her
employment. This recognition can occur either formally or informally and has
historically taken on many different forms.
The purpose of this policy is: (a) to provide examples of different types of associate
recognition and awards (b) to provide the times where associate recognition or an
award may be appropriate and allowable (c) to identify both suggested and
prohibited types of associate recognition and award items (d) to provide monetary
limits on such items to ensure that adequate cost controls are in place; (e) to
provide guidance on the associate recognition policy so consistency amongst
regions can be achieved (f) to provide guidance on the appropriate tax treatment of
such items, and finally (g) to provide the processes for requesting, approving, and
reporting associate recognition and awards items.
Please refer to Exhibit A at the end of this policy for a summary of Employee
Recognition items and limits, presented in a table format.
RATIONALE:
Wheaton Franciscan Healthcare encourages the recognition of outstanding
performance and achievement through the use of rewards that are creative and
meaningful. When administered and communicated effectively and within
compliance guidelines, rewards and recognition are an important part of a total
compensation program. Our Value of Respect calls us to value each person as
sacred, and recognizes the good work and accomplishments of others. Our Value
of Development combines the physical, emotional, spiritual and relational aspects of
life and work, and values the professional and personal accomplishments of others.
Our Value of Excellence strives to exceed the expectations of those we serve, and
values superior performance in our work and service. Therefore, WFH recognizes
that department leaders and other associates may desire to formally or informally
recognize a fellow associate or a volunteer for a superior achievement or
accomplishment, and acknowledges this recognition can occur in a variety of ways.
SCOPE:
This policy applies to all associates who are employed by Wheaton Franciscan
Healthcare or any affiliated entity, and applies to all Tier I, II, III and IV institutions
owned and managed by Wheaton Franciscan Healthcare.
This policy deals with items given by an employer to an employed associate, and
refers to these items as either “gifts” or “awards”. These awards can include items
given to a specific associate in recognition of some act, or a randomly given item
(such as in a “raffle”). For items received by, or given to associates from vendors,
patients, business associates, and others, please reference Gifts, Gratuities and
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Associate Recognition and Achievement Awards
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Business Courtesies, and Conflict of Interest Policy.
This policy and the related guidelines do not apply to customary work-related
expenses such as travel, conference attendance, and memberships in professional
organizations. For guidelines related to business-related reimbursements, please
reference the policy Reimbursement for Business Travel and Seminar Expenses.
PROCEDURE:
Wheaton Franciscan Healthcare will consider the use of budgeted departmental
funds to purchase certain categories of Associate Recognition and Achievement
Awards, subject to the guidelines and procedures set forth under each section
below. Please cross reference Exhibit A, which summarizes this information in a
table format.
1. Cash Equivalents (Gift Cards, Gift Certificates, and/or Cash)
Any form of cash equivalent given by an employer to an employed associate
is fully taxable regardless of the amount. This includes all forms of gift cards,
gift certificates, and/or cash, where a readily determinable cash value is apparent,
even if a cash value is not printed directly on the face of the item.
Examples of Cash Equivalents that are fully taxable, regardless of amount,
include:
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Department Store Gift Certificates or Gift Cards
Food Store Gift Certificates or Gift Cards
Mall Gift Certificates or Gift Cards
Restaurant Gift Certificates or Gift Cards
Home Improvement Store Gift Certificates or Gift Cards
Wheaton Franciscan Healthcare recommends seeking out other forms of
recognition. However, in those rare instances where a cash equivalent is
given, the following procedure should be followed:
A. Call or email your WFH Tax Contact OR your local Payroll Department, and
include the following information:
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Associates full name
Entity where the associate/recipient is employed
Type of cash equivalent
Amount of cash equivalent
Date of recognition item (Example: Mary Smith, WFH-St. Joseph,
10/01/08, $50 Department Store gift certificate)
B. Tax or Payroll will forward this information to the appropriate associate.
C. Payroll will add the value of the cash equivalent or other taxable item to
gross income, and subtract the required withholding from the associate’s
next paycheck. Depending on the associate’s federal and state income tax
bracket, in combination with FICA taxes (Social Security and Medicare), this
withholding is estimated to be approximately 30% of the value of the item
(Example: On a $50 gift card there would be approx $15 in taxes withheld).
D. Payroll must receive the information in a timely manner in order to complete
the proper reporting in the same tax year as the gift was given (based on a
calendar year). Thus, information regarding gifts given in December must
be sent directly to payroll department so the associate is taxed in the same
year as the receipt of the gift, per IRS guidelines.
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2. Non-Monetary Associate Recognition Items
Non-monetary items can be given freely with no tax implications, and are
encouraged over the use of cash or cash equivalents. These items include such
things as letters of commendation, letters of recommendation, or a special thank
you in the form of a letter, card, email, or other written correspondence.
3. Voucher or Coupon for Holiday Item
A voucher or coupon for a specific tangible gift at holiday time, such as a turkey,
ham, pie, or other similar item are acceptable and carry no tax implications, as long
as the voucher or coupon has no readily determinable cash value, and can only be
exchanged for a specified tangible item of nominal value (a turkey, ham, pie, or
similar item). A gift certificate or gift card to a food store would not be a voucher or
coupon; rather it is considered to be a cash equivalent that is fully taxable. A cash
equivalent can not be converted to a non cash equivalent by instructing the
associate to use the cash equivalent only for the specified item.
Vouchers or coupons typically must be arranged directly with the vendor to ensure
the voucher and invoicing is in the proper form. The voucher or coupon should
specifically identify the item to be redeemed with no cash value (Example: “This
holiday voucher good for one Jennie-O Turkey of up to 15 lbs, redeemable until
November 15, 2008 at selected food store”).
Other holiday giving, such as an annual Christmas party and any related giving at
the party itself, are acceptable and carry no tax implications, provided the monetary
limits and other guidelines in this policy are followed.
4. Other Tangible Non-Cash Items
To recognize an associate for an achievement, tangible items of nominal value can
be given with no tax implications. The value of the item should be de minimis ($20
or less) and can be awarded for wellness initiatives (such as a walking, weight loss,
or stop smoking program), annual events (such as Nurses Week or Administrative
Professionals Day), prizes or awards for contests (such as holiday door decorating,
or a department initiative or goal that was reached), at a holiday or department
function (such as at a facility anniversary or Christmas party), or for an outstanding
accomplishment or achievement by an associate or volunteer.
Examples of appropriate recognition items of $20 or less in value would include:
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Water Bottle or Pedometer
Beach Towel
Clock, Lamp, or other item for work space
Tee Shirt, Sweatshirt, or Fleece
Gift shop pens or other items of small value
Other similar nominal items
Items that bear the “Wheaton Franciscan Healthcare” company logo may be
imprinted on the item but is not required. If the company logo is imprinted
on the item, and the cost per item exceeds the internal policy limit of $20,
WFH will treat this item as being non taxable, provided the value of the item
does not exceed $50. However, all other items without a company logo and
greater than $20 in value will be considered taxable, including items donated
to Wheaton Franciscan Healthcare that exceed these values.
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EXAMPLE OF GIFT:
Jen is the Surgery Dept Manager and held a contest to determine the most cost
effective way to sterilize some of the department’s instruments. Ray came up with
a great idea for the department, and Jen would like to reward him with a small gift,
using budgeted dept funds.
Jen gives Ray a $15 gift certificate to a local restaurant. The gift certificate is fully
taxable, regardless of amount, because it is a cash equivalent. Jen must follow the
procedure outlined under #1 to report the amount to payroll. Jen should also attach
to any related check request, a copy of the communication showing that the item
was appropriately reported to the payroll department.
Jen gives Ray a $20 desk lamp. The desk lamp is completely tax free because it is
not a cash equivalent, and is under the internal policy limit of $20 or less. Jen only
needs to document, on any related check request, that the gift is under the $20 limit
and therefore is not taxable to the associate.
Jen gives Ray a $25 desk lamp. The desk lamp is fully taxable, because it exceeds
the internal policy limit of $20. Jen needs to report the entire $25 to the payroll
department, following the procedure outlined under #1. Jen should also attach to
any related check request, a copy of the communication showing that the item was
appropriately reported to the payroll department.
Jen gives Ray a $40 Fleece. Imprinted on the fleece is the Wheaton Franciscan
Healthcare logo. The fleece is completely tax free because the company logo is
imprinted on the item, and the item’s value is $50 or less. Jen only needs to
document, on any related check request, that the gift is under the $50 policy limit
and contains the company logo, and is therefore not taxable to the associate.
5. Special Occasion Gifts
Wheaton Franciscan Healthcare acknowledges that there are times when associate
life events occur, and fellow associates may want to send a gift item as a measure
of well wishes or concern. These occasions can include, but are not limited to the
following:
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Associate Birthday or other special day, such as Wedding, Anniversary, or
Baby’s Birth
Associate Life Crisis, such as Illness, Injury, or Death in the Family
Newly Hired Associate or Resignation/Retirement of an Associate
A Facility Anniversary or other Milestone
Wheaton Franciscan Healthcare’s normal policy would expect associates to
contribute their own funds to purchase such items. However, in the case of an
associate life crisis, there may be an appropriate reason to grant an exception.
Department heads have discretionary authority to expend budgeted funds for
special occasion gifts if deemed appropriate.
Rewarding or recognizing an associate or group of associates for an
accomplishment by taking the associate(s) out for lunch or dinner at employer
expense is acceptable, as long as it is undertaken as special occasion giving that
does not occur with any degree of frequency, and is not lavish or excessive.
6. Associate Discounts
Discounts granted to associates to purchase items in the gift shop or cafeteria can
be allowed with no tax implications, as long as the discounts are occasional and
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reasonable in amount.
7. Cafeteria Vouchers
Cafeteria Vouchers can be awarded with no tax implications, as long as no cash
value is readily determinable on the face of the voucher. Cafeteria vouchers should
be used to award a specified item, such as “redeemable for one 20 oz bottle of
soda” or “redeemable for one pizza”.
8. Formal Associate Recognition Annual Event – Associate Achievement
Awards
An annual event to recognize and reward associates for years of service is
acceptable and has no tax implications, as long as certain guidelines are followed.
Both full time and part time associates are eligible for such awards. The following
guidelines must be met:
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Event must occur with regular frequency and be part of a meaningful
presentation or ceremonial observance emphasizing the recipient’s years of
service or an achievement in the area of safety.
The event must not award associates within the first five years of their
employment (but can be awarded beginning on the 5 year anniversary, and
each 5 years thereafter).
The associate must not have received a similar award within the current
year or within the preceding four years.
The value of such item must not exceed $400 per associate and must not
be a cash equivalent (if the item awarded is a cash equivalent, it is fully
taxable to the associate, and must be reported to the Payroll Department
using the procedure outlined under #1).
The associate will normally be presented with a gift catalog where one item
can be selected in a specified category.
Associates may also receive a certificate, and in special cases of 25 years
or more, may also be presented with a plaque.
Replaces:
Service Recognition policy
Cross reference:
Gifts, Gratuities and Business Courtesies policy
Conflict of Interest policy
Reimbursement for Business Travel and Seminar Expenses policy
Review Period:
Two (2) years
Original Policy Date:
October 1, 2008
Dates Updated:
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Exhibit A - Summary of Associate Recognition Awards and Related Information
For any items that exceed the following limits or are otherwise determined to be taxable, the
procedure under #1 above should be followed to report the item to the Payroll Department.
Reward
Type
Approval
Needed
Department
Head and
One Level
Above
None
Frequency
Taxable?
Does not
apply
No
No,
provided
structured
correctly
No,
provided
value does
not exceed
$20
No,
provided
value does
not exceed
$50
No
1 Cash, Gift Certificates,
Gift Cards, or other
“Cash Equivalents”
Cash
2 No Monetary Value
(Thank You Card or
Letter of
Commendation)
3 Holiday Item (Turkey,
Ham, or Pie)
Non
Cash
Non
Cash
Department
Head
Once per Year
$20
4 Other Tangible Items
of Personal Property
with Nominal Value
(Water Bottle, Beach
Towel, T-Shirt, etc.)
Items Bearing
Wheaton Franciscan
Logo (Fleece, Coffee
Mug, Golf Item,
Baseball Hat, etc.)
5 Special Occasion
Gifts
Non
Cash
Department
Head
As appropriate
$20
Non
Cash
Department
Head and
One Level
Above
As appropriate
$50
Non
Cash
Department
Head and
One Level
Above
Department
Head and
One Level
Above
As appropriate
Does not
Apply
As appropriate
Department
Head of Gift
Shop or
Cafeteria
Department
Head
Department
Head and
One Level
Above
As appropriate
Does not
No
apply,
provided
reasonable
in amount
$10
No
As appropriate
$10
No
Once every 5
Years
$400
No,
provided
value does
not exceed
$400
Special Occasion
Dinners or Lunches
Non
Cash
6 Associate Discounts
Non
Cash
7 Cafeteria Vouchers
Non
Cash
Non
Cash
8 Associate
Achievement Award
Presented at a Formal
Recognition Event
As
appropriate,
but
discouraged
As appropriate
Monetary
Limit
Does not
apply
Yes,
regardless
of amount
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