As the Government’s partial shutdown continues, several companies are offering freebies, discounts, or loans to Government employees and others. The longer the shutdown has gone on, the bigger the offered benefits have become. Unfortunately, such offers could ultimately hurt the very people the companies are intending to help (and in some cases hurt the companies, too) due to prohibitions on what Government employees can accept from outside sources.

Although many of these offers likely will not cause an issue for the employees or the company, some may. Thus, companies that are considering making these offers should carefully consider the applicable regulations and laws.

The General Rule

Government employees must comply with ethics laws and regulations that govern when they can accept things of value from others. These laws and regulations apply even when the employees are on furlough.

One of these regulations prohibits Government employees from soliciting or accepting a “gift” from a “prohibited source” or “given because of the employee’s official position.”[1] A “gift” can mean a broad range of things, including any:

  • gratuity,
  • favor,
  • discount,
  • entertainment,
  • hospitality,
  • loan,
  • forbearance,
  • other item having monetary value,
  • training,
  • transportation,
  • local travel,
  • lodgings, and

If an employee’s ethics office later determines that the employee accepted an item in violation of the regulations, the employee’s agency may reprimand, suspend, demote, or remove the employee from his/her position.[3] If the offer was intended to influence the Government employee, the employee and the person or company offering the item could also face prosecution or fines.[4]

Some exclusions and exceptions and how they work

Despite the broad rule, there are certain offers that are excluded from the definition of “gift” (meaning employees may generally accept them), and there are also exceptions to the rule. Many of the offers being made to Government employees now may fall under an exclusion or exception, including those described below, but some may not.

A common offer that is excluded from the definition of “gift” is a favorable rate, discount, or similar benefit that is offered to the general public or “all Government employees.[5]” Note the world all. Thus, an offer that is made to only a subset of Government employees (such as only furloughed or impacted Government employees) is a “gift.”

Nevertheless, some offers made to a subset of Government employees may be a “gift” that could be accepted under one of the exceptions to the rule.[6] One of the commonly used exceptions applies to smaller gifts.[7] This exception generally allows a Government employee to accept unsolicited gifts where (a) the market value of the gifts is less than $20; (b) the employee’s acceptance of the gifts would not result in the employee accepting $50 or more in gifts from the source in the calendar year; and (c) the employee does not pay the gift-giver for gifts it receives in excess of the $20 limit.[8] This exception applies on a per-occasion basis and not a per-person basis. Thus, when an offer includes guests of the Government employee, the per-occasion limit includes the market value of the offer for all people accompanying the Government employee.[9]

The Takeaway

Although your company may want to help those impacted by the partial shutdown, if Government employees accept your offer in violation of their ethics obligations, they may face disciplinary actions once they return to work. Thus, if you are considering making an offer to help them, make sure you are considering their (and your) ethics obligations and make sure you understand the exclusions and exceptions to the gift-acceptance regulation. Doing so will help your company make sure your offer does not do more harm than good.