NON SALARY REWARDS
Contents:
Scope
Key Points
Background
Cash Bonuses etc
Amenities and Recreational Facilities
Other Benefits
Tax Implications
Annex: Regularity, Propriety and Value for
Money
Scope
1. This section gives guidance on the propriety and
regularity aspects to be taken into account when
introducing non-salary rewards in addition to contractual
salary arrangements. The guidance is aimed primarily at the
constituent parts of the Scottish Administration (ie
Scottish Executive Departments, Executive Agencies and
associated Departments) and bodies sponsored by the
Scottish Executive. However, it is equally relevant to
other organisations subject to the requirements of the
Scottish Public Finance Manual (SPFM).
Key Points
2. Active consideration should be given as to whether
non-salary reward schemes represent an appropriate use of
public funds.
3. Public bodies should be open and transparent in the
way they deal with non-salary rewards. They should have
clear policies on disclosure of information about the
awards which have been made and the procedures adopted for
making those awards.
4. The tax implications for both employers and employees
of the provision of non-salary rewards should be carefully
considered.
Background
5. In devising staff benefits and non-salary reward
schemes particular attention should be paid to propriety.
The scope of propriety in relation to public bodies is
wider than elsewhere and includes the standards of
behaviour which the Parliament and the public would expect
from public bodies in the way they spend public money. The
Annex to this section sets out general guidance on
regularity, propriety and value for money in relation to
staff benefits and non-salary rewards.
6. When introducing non-salary reward schemes active
consideration should be given as to whether they represent
an appropriate use of public funds. Public bodies should be
open and transparent in the way they deal with non-salary
rewards. They should have clear policies on disclosure of
information about the awards which have been made and the
procedures adopted for making those awards.
Cash Bonuses etc
7. Cash bonuses to reward individuals and groups may be
offered subject to the necessary criteria attached to
reward schemes being met. Funds may also be allocated to:
the improvement in the working environment; job-related
items required for official duties; and token gifts or
one-off awards. In all such cases the scale of the
expenditure must be reasonable for an employer to
incur.
Amenities and Recreational Facilities
8. Reasonable provision may be made for amenities and
recreational facilities for the use of
all staff. Arrangements will vary between
bodies depending on numbers and location of staff, but are
subject to the following points:
- expenditure needs to be assessed in terms of staff
welfare, morale and motivation, and also the value and
propriety of using public money to finance the
provision of such facilities - it may not be sufficient
to draw analogies to the provision of similar
facilities in the private sector.
- Accountable Officers should take a close interest
in such facilities and be satisfied that guidelines are
clearly and properly drawn up, and that arrangements
are in place to ensure that management adheres to these
guidelines. It is recommended that these guidelines
should provide for the Accountable Officer to approve
any major or unusual cases or any cases carrying the
risk of public criticism.
- expenditure on these facilities should be assessed
in the same way as it would for any other investment
project. Consideration should be given as to whether
alternative options might get better value for money
such as: negotiated discounts for use staff to use
alternative providers; or a group subscription for
staff use.
- there should be consideration whether staff could
reasonably contribute, either collectively through
representative groups or individually through charges
for the use of facilities.
9. If the costs of recreational facilities are being
included in another wider project the costs and nature of
the amenity or recreational facility should be clearly
identified and assessed in its own right.
Other Benefits
10. Other non-salary benefits include the following
examples:
- gifts, vouchers, and entertainment offered as
rewards under recognition schemes;
- payment by the employer of its staffs' personal
subscriptions to sports or leisure clubs;
- rewards leading to donations to a charity or other
external body; and
- provision of cars where they are needed for
official purposes and are covered by an existing and
agreed scheme which includes charging for any private
use.
11. Care should be taken to avoid any criticism of
unfair preference being given to certain shops, companies
or charities. It is therefore recommended that the
recipient of the reward be given some choice or that
third-party suppliers are used where, for example, voucher
schemes are introduced.
Tax Implications
12. The tax implications for both employers and
employees of the provision of all non-salary rewards - cash
and non-cash - should be carefully considered. In
considering such schemes, it may be appropriate to seek
expert PAYE advice - see separate guidance on
Tax Planning and Tax Avoidance.
13. When consulting about a proposed scheme, or advising
employees of a scheme to be implemented, employers should
advise employees of the tax implications for recipients and
how these are to be handled.
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Page Published/ Updated on: 4th November 2004