Employee recognition expenses

The University recognizes the importance of rewarding or acknowledging an employee’s service and performance. This policy establishes when and how the University will pay or reimburse the cost of employee recognition awards (monetary and non-monetary). This policy will be known as the “Seattle University Employee Recognition Award” policy.

A. What Is An Employee Recognition Expense?

An employee recognition expense is incurred for the purpose of rewarding or acknowledging an employee’s performance or service. Typical employee recognition expenses include gifts to employees, service awards, retirement gifts, and honorary receptions. Employee recognition expenses may be considered to be taxable income and are subject to rigorous scrutiny by the Internal Revenue Service (IRS).

B. What Employee Recognition Expenses Are Allowable?

In accordance with IRS guidelines, the following categories describe the types of recognition expenses that the University will pay or reimburse. Requests for reimbursement require an approved and completed Check Requisition Form with attached documentation. Only the President, Executive Vice President, Provost, Deans, or any Vice President (or designee) can approve requests for payment or reimbursement of employee recognition expenses with the exclusion of 2.a. below.

1. Gifts to employees to recognize performance:

a. With the requisite authorization, the University will pay or reimburse the cost of gift certificates (monetary) provided to employees to recognize performance. If an employee receives a gift certificate in excess of $25, the full amount will be reported on the employee’s W-2 as income.
b. With the requisite authorization, the University will pay or reimburse the cost of non-monetary awards provided to employees to recognize performance. If an employee receives a non-monetary award valued in excess of $75, the full value will be reported on the employee’s W-2 as income.

2. Employee service awards: An employee service award is tangible personal property awarded to an employee in recognition of a milestone in service.

a. The University recognizes service milestones during the annual Employee Appreciation Event. The University pays or reimburses these expenses in compliance with IRS guidelines.
b. Additional service recognition by departments may be paid or reimbursed by the University if such recognition is awarded in a meaningful presentation. Cash or gift certificates will be handled as described in B.1.a. Reasonable non-monetary service awards are not taxable to the recipient.

3. Retirement gifts: With the requisite authorization, the University will pay or reimburse the cost of non-monetary awards within the following limitations:

 

Length of Service Maximum Amount
10 years of service $200
10 to 20 years of service $300
Over 20 years of service $400

 

The retiree must have been employed at least 10 years at the date of retirement.

4. Farewell gifts: With the requisite authorization, the University will pay or reimburse the cost of non-monetary awards within the following limitations:

 

Length of Service Maximum Amount
5 to 10 years of service $100
10 to 20 years of service $150
Over 20 years of service $300

 

For both retirement and farewell gifts, the gifts should be given at a meaningful presentation. These non-monetary gifts qualify as length-of-service awards under IRS regulations. Therefore, the gifts are not reportable as income to the recipient. To qualify as a non-taxable award, the award must not be in the form of cash or a gift certificate.

C. How to Request an Exception to This Policy

1. Whenever expense reimbursement policies are mandated by the IRS, no exceptions can be granted. If you have questions, please contact the Office of Finance & Investments.

2. Whenever expense reimbursement policies are mandated by University policy, Accounts Payable will process an exception request on receipt of written approval from the President, Executive Vice President, Provost, Deans, or any Vice President (or designee) of the University.

Contact Information

For information about this policy, please contact the office of record:

The Human Resources Department

hr@seattleu.edu, (206) 296-5870