It’s the holiday season and your company’s purchasing manager received a bottle of wine from a longtime vendor and you think, 'No problem, it’s just a bottle of wine'.

A week later you learn that it was actually an extremely rare bottle worth over $1,000. Now you may have a problem.

While your policy is not clear on this issue, the gift is the very type that may create the appearance of impropriety, whether a conflict of interest or bribe.

How can you prevent this from happening again? By having a Gifts and Entertainment (G&E) Policy. Here is an overview of this corporate necessity – especially this time of year – and the five things that should be addressed in your policy.

Gifts & Entertainment Policies: A Basic Overview

G&E policies can help prevent the situation described above from occurring and can demonstrate your company’s commitment to conducting business ethically and with integrity. An effective G&E policy can’t address every possible situation, but a well-drafted policy can promote consistency, encourage ethical business relationships, minimize potential concerns, and provide guideposts for your employees – as well as your business partners.

Who Should Be Covered By the Policy?

The policy should apply to all employees – from the newest hire at the very bottom of the corporate ladder all the way up to the CEO. It is not uncommon for upper executives to receive gifts from business partners at any time of year, but especially during the holidays.

If top executives are allowed to receive gifts and entertainment that exceed the company limits, it can send the message that the ethical standards apply to all employees except the C-Suite executives. This hurts morale and can lead employees to assume that it is acceptable to violate other company standards.

On some occasions, executives or other employees may be invited to official events that may exceed the entertainment limits. This is usually acceptable provided the events are deemed commercially reasonable and the individuals are representing the company.

Keep in mind, however, that in some countries such entertainment may violate local anti-bribery laws and could be considered a violation of federal U.S. law. Therefore, it is important to have such events approved in advance by the company’s legal or compliance group.

The 5 Things Your G&E Policy Should Address

1. Dollar Limits on Gifts and Entertainment

Gifts are generally deemed to be anything of value and entertainment usually includes events such as dinners, sporting events, and performances.

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Melissa Dials approaches each day by asking two simple questions: who have I helped and what have I learned? She strives to serve each client by first listening to their needs and learning their business and culture. This thoughtful approach enables Melissa to provide legal counsel that not only mitigates legal risk but also reflects her clients’ values.

Melissa’s practice is multifaceted. She counsels employers on a wide variety of day-to-day employment and labor issues, including wage and hour law, employee leave issues, reasonable accommodations, workplace harassment, and reductions-in-force. She assists employers in developing proactive employee relations programs, including developing employee handbooks and conducting supervisory training. Melissa also defends employers responding to charges before administrative agencies like the Equal Employment Opportunity Commission and the Ohio Civil Rights Commission.

Raymond Perez is Of Counsel in the firm’s Columbus office and Chair of the Corporate Compliance and Governance Practice Group. He focuses his practice on advising employers on the development and implementation of compliance and ethics programs, codes of conduct, and diversity, equity and inclusion initiatives. In connection with compliance programs Ray also advises clients regarding workplace investigations particularly investigations involving executives and significant reputational risks. Ray also advises clients on the interplay between antitrust laws and labor and employment issues and counsels clients on best practices to avoid potential liability. Ray also assists clients with all aspects of their diversity, equity and inclusion efforts such as training, employee surveys, developing mentorship programs and creating business resource groups.