First of all, who in Companies is responsible for taking care of holiday festivities?
In many organizations, that task falls to either the CEO’s Executive Assistant or to the Head of HR. Fortunately, they are usually able to count on the support of a social committee comprised of a cross-section of volunteers from throughout the Company. The Social Committee has broad freedom to plan events, with of course some ground rules already spelled out regarding e.g. budget $ available to spend; eligibility; and the handling of alcohol.
Before the Social Committee gets to work though, there is usually research done to understand what is being planned by other employers to mark the season, in terms of e.g. $ spending per employee, plus any gifts and/or events such as a children’s holiday party Armed with this data, HR and/or the EA and/or the Social Committee Chair present a recommendation to the Senior Management Team and/or the CEO for approval.
What are some of the concerns regarding holiday plans that occupy the minds of the Senior Management team?
1. Liability: Is someone going to get drunk and cause harm to themselves and/or others?
2. Offense: Are planned activities inadvertently going to offend some subset of the Employee population?
3. Budget: Is the Company in a financial position to fund holiday activities? Also, how do funding and the activities that funding will support compare with prior years? As well, should the Company be spending more or less than in past years and what are the implications of doing so?
4. Perception: How are Company holiday plans going to be perceived when the economy is in recession; when your business revenues may be down; when your customers may be in hardship; when you’re possibly restricting spending and/or may be laying off staff? What is employee morale like? What is the feedback that you’ve received from employees regarding past or planned holiday activities?
5. Tax: The Canada Revenue Agency has been a grinch for the holidays for many years. Expenditures above certain nominal amounts are viewed as taxable employee benefits, to be reflected on employees’ annual T4 slips, with appropriate income tax deducted. Some of what your Company may want to do, such as gifts to employees, will catch the eye of the taxman, and so this has to be factored into plans. What to do?
What a lot to think about at a time of the year when we should all be having fun.
So, what can one do?
Well, the good news is that despite all of the concerns, most organizations are still planning on holding holiday season events. In conversations with HR leaders for many of Canada’s most respected businesses, they are going ahead with plans for holiday parties for employees and guests, and in some cases, for holiday parties for families and/or children. A fair number of organizations will use these holiday events to provide token gifts (so as not to trigger taxable employee benefits). Finally, some organizations will pay the tax for their employees on gifts in order to be able to continue with traditions that are highly valued by employees.
Many organizations will continue to provide alcoholic beverages at employee events and will manage potential risks by: a) communicating with employees about drinking responsibly b) providing taxi chits for use in case of employee safety in driving or taking public transit being at risk and/or c) limiting the amount of free alcohol or alcohol in general that is available during the holiday event.
Finally, many Companies are continuing to take the long view. While being prudent around spending during this recession, they understand that this too shall pass, and they are in it for the long haul. As a result, they are continuing to allocate budget dollars for holiday events, and to celebrate this wonderful time of the year.