I work for a company where sales people are compensated based upon their production; in other words, straight commission. But entertainment expenses are reimbursed to the salesperson by the company rather than from the salesperson’s own funds. There are times when the level of entertainment seems way beyond what is appropriate. When does entertainment become bribery?
In this case, we must address not only the ethical issue, but also the compliance issue. Depending upon the industry, there may be laws that regulate the level of entertainment allowed; these laws are sometimes referred to as “anti-rebating.” Also, when the customer, or client, is a public entity, there may be specific legal limits on the amount that a vendor may spend on an employee of the entity. Those limits are usually made clear on the website of the entity; and employees are required to share those limits with vendors. In addition, excessive entertainment of a government official can constitute violations of the FCPA, UK Bribery Act of 2010, and other anti-corruption laws.
