Incentive Legislation Campaign

Protecting the Right to Motivate

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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.

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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.

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The Role of MotivationSafety 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

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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 If employers have to “gross up” the tax, costs go up and employers may be reluctant to offer awards.

o 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.

(NOTE: not only highlight what could happen in future but also highlight what accomplishments have been realized in the past)

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The IF involvementThe 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

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Proven SuccessFederation 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-of-service 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. 

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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.

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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 Awardso Business Giftso Consumer Promotionso Wellness Programso Travel Awardso Safeguard against fraudo Etc…

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RC Threats & Opportunities

Threats o Service and safety awards 274(j)

Positive opportunities o Tax benefit for wellness incentive programs   

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PIC Threats & Opportunities

Threats o Service and safety awards 274(j)o General concern for government regulations and legislation

that impact business

Positive opportunities o Tax benefit for wellness incentive programs o 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.

        

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IGCC Threats & Opportunities

Threats o Service & safety awards 274(j)o Safeguard against gift card fraudo General concern for government regulations and legislation

that impact business

Positive opportunities o Append 274(j) to incorporate tax benefit for gift card awardso Tax benefit for wellness incentive programs o 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.

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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

 

 

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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

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ResourcesRick BlabolilIF Board of DirectorsMarketing Innovators

Heidi ChatfieldChair, IF/ILC Task ForceAll Star Incentive Marketing508-347-8820

Donna ChrobakILC Task ForceDCI Incentives770-316-9398

George DeltaIF Legal CounselDelta Lawxxx-xxx-xxxx

Brian GalonekChair IF/ILC FundraisingAll Star Incentive Marketing508-347-8810

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

Mike Self

ILC Task Force

Special Markets Associates

623-474-3957

Michelle Smith

IF Board of Directors/Legislative Chair

OC Tanner

626-796-5544

 

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ResourcesVisit www.incentivefederation.org