Incentive Legislation
Campaign
Protecting the Right to Motivate
The Immediate Threat
The legislative threats facing our industry have
never been greater…
As the U.S. government positions for aggressive tax reform and
debt reduction, there are powerful forces in Washington that
threaten our most effective business tool for creating a safer
workplace, shaping corporate culture, and building employee
loyalty and engagement.... the reward solutions you use to
support safety and length-of-service (LOS) programs.
www.incentivefederation.org
2
Our Tax Provision
274(j) supports safety and length of service (LOS) programs
by providing tax deductions to employers and tax exclusions
to employees.
o
An annual deduction of up to $400 per employee for safety or LOS
achievement awards made outside of a qualified plan designed for
providing such rewards
o
An annual deduction of up to $1,600 per employee for safety or LOS
achievement awards provided as the result of a qualified plan
Tax benefit encourages adoption…
…incentives drive engagement.
www.incentivefederation.org
3
The Role of Motivation
Safety Awards
•
•
•
•
Promote and support education, training, communication,
performance, wellness, and retention
86% of accidents are triggered by unsafe behavior
OSHA supports well designed programs
The majority of accidents are preventable
Service Awards
•
•
Build and increase relationships, retention, morale, and teamwork.
Engaged employees = engaged companies
– 27% higher profits
– 50% higher sales
– 50% higher customer loyalty
– 38% higher productivity
– 20% more revenue per employee
– 16% improvement in market share
www.incentivefederation.org
4
The Business Impact
If you supply awards, sell to companies that run safety or
LOS programs, or deliver safety or service award
programs, your business is at RISK!
o
If 274(j) legislation is eliminated:
o Employees are taxed for awards - they may have to sell the
award to pay for the tax or not accept the award at all.
o
o
If employers have to “gross up” the tax, costs go up and
employers may be reluctant to offer awards.
If these programs go away:
o The economy is negatively impacted – increase in job lost
time, employee recruitment, accidents, workers comp rates,
and project costs.
o The award supply chain will be negatively impacted.
o Businesses pull back on their investment in these programs.
o Companies who design these programs may cease to exist.
o Requests to buy products from manufacturers, reps and
channel partners will be reduced.
www.incentivefederation.org
5
The IF involvement
The Incentive Federation Inc. is the organization founded to
promote, protect and research the incentive field. The Incentive
Legislation Campaign (ILC) is the legislative arm.
A distinguished panel from the Incentive Federation's Board of Directors
is working aggressively to…
o
Monitor legislation that could affect the use of incentive, recognition
and related promotional programs
o
Establish a more robust relationship with Members of Congress and
lawmakers to address industry issues
o
Raise awareness of our industry's significant role in improving
business productivity, creating jobs and demonstrating that
recognition and reward solutions are powerful and effective business
tools
o
Ensure that we are fully aware of opportunities and threats for our
business/industry
o
Protect our collective right to motivate
www.incentivefederation.org
6
Proven Success
Federation Achievements since its inception in 1984…
Recognition and safety programs
The Federation played an important role in the enactment of Internal
Revenue Code section 274(j), which provides a significant tax
benefit for the use of merchandise rewards in safety and length-ofservice programs, as part of the Tax Reform Act of 1986.
OSHA regulations
When OSHA stated in its proposed ergonomics rule that safety
incentives do not work and lead to the under reporting of injuries, the
Federation fought to ensure that OSHA would not oppose properly
implemented safety programs when it adopted the final ergonomics
rule in 2000. The Federation convinced OSHA that there was no
empirical evidence that safety programs led to the under reporting of
injuries and that studies showed well-designed safety programs
would lead to the reduction of workplace injuries.
www.incentivefederation.org
7
Proven Success
Protection of bank incentives and premiums (1984-1985)
When federal regulators sought to ban the use of premiums
and incentives by financial institutions, the Federation
protected this important motivational tool. Through its efforts,
federal regulators came to understand that financial institutions
had important, legitimate uses for premiums and incentives
and should not be banned or curbed.
Protection of sweepstakes and contests (ongoing)
The Federation has helped state and federal regulators
understand that sweepstakes and contests should not be
saddled with onerous and unfair requirements.
Meetings with Members of Congress (ongoing)
Over 100 meetings held with influential Members of Congress
(Senate and Congress) and the Treasury Department. These
include numerous members of the Senate Finance and House
Ways & Means Committees.
www.incentivefederation.org
8
What does the future hold?
Without your ongoing support we can’t be heard!
Though currently lobbying for support of 274(j), our industry’s only tax
provision the ILC is committed to maintaining a vigilant presence in
Washington DC to ward off other potential threats and seize positive
opportunities that could impact our industry…
o Sale Force Incentive Awards
o Business Gifts
o Consumer Promotions
o Wellness Programs
o Travel Awards
o Safeguard against fraud
o Etc…
www.incentivefederation.org
9
RC Threats & Opportunities
Threats
o
Service and safety awards 274(j)
Positive opportunities
o
Tax benefit for wellness incentive programs
www.incentivefederation.org
10
PIC Threats & Opportunities
Threats
o
o
Service and safety awards 274(j)
General concern for government regulations and legislation
that impact business
Positive opportunities
o
o
Tax benefit for wellness incentive programs
To mitigate the risks associated with this government
regulation trends a continued presence in DC is required and
educating Members of Congress about our industry is
essential.
www.incentivefederation.org
11
IGCC Threats & Opportunities
Threats
o
o
o
Service & safety awards 274(j)
Safeguard against gift card fraud
General concern for government regulations and legislation
that impact business
Positive opportunities
o
o
o
Append 274(j) to incorporate tax benefit for gift card awards
Tax benefit for wellness incentive programs
To mitigate the risks associated with this government
regulation trends a continued presence in DC is required and
educating Members of Congress about our industry is
essential.
www.incentivefederation.org
12
How can you help?
As leaders in this industry, it is time for all of us to
take on the responsibility of protecting our industry
not only today but into the future…
Financial support
Ideas and resources
Local mobilization
www.incentivefederation.org
13
Financial Investment
$150,000 is needed annually to sustain our presence in
Washington
o
Lobbyists
o
DC Assemblies (travel not included)
o
PR Outreach
o
Promotional Material
o
Administration
www.incentivefederation.org
14
Resources
Rick Blabolil
IF Board of Directors
Marketing Innovators
Heidi Chatfield
Chair, IF/ILC Task Force
All Star Incentive Marketing
508-347-8820
Donna Chrobak
ILC Task Force
DCI Incentives
770-316-9398
Lisa Lister
ILC Task Force
Almo
Dave Peer
ILC Task Force
Hinda
773-890-5900
Karen Renk
Chair, IF Board of Directors
AE Inc.
630-369-7780
George Delta
IF Legal Counsel
Delta Law
xxx-xxx-xxxx
Brian Galonek
Chair IF/ILC Fundraising
All Star Incentive Marketing
508-347-8810
Mike Self
ILC Task Force
Special Markets Associates
623-474-3957
Michelle Smith
IF Board of Directors/Legislative Chair
OC Tanner
626-796-5544
www.incentivefederation.org
•
15
Resources
Visit www.incentivefederation.org
www.incentivefederation.org
16