Though perhaps not a common occurrence, there are situations in which public employees may be offered a tip for services performed in connection with their jobs. While there is no Oregon law that expressly forbids public employees from accepting tips, the acceptance of tips could violate Oregon’s government ethics laws. It is important for government employers to understand how these government ethics laws apply to tips so they can make informed policy decisions to regulate tip-accepting and avoid violations of government ethics laws:
Tips as “Gifts” and “But For” Financial Gains
Under Oregon government ethics laws, a “gift” is anything that has economic value and that a public employee receives without giving consideration in exchange for it. ORS 244.020(7)(a). Public employees cannot solicit or receive gifts that, in total, exceed $50.00 per calendar year from each donor that has or could be reasonably expected to have a legislative or administrative interest in the public employees’ decisions. ORS 244.025.
ORS 244.040(1) forbids public employees from using their position to obtain a financial gain that they would not have obtained if they were not public employees: “But for” the public employee’s job, would the public employee have obtained the financial gain? If the answer is no, the public employee would not have obtained the financial gain if they were not a public employee, then the public employee has violated ORS 244.040(1). However, gifts received in compliance with ORS 244.025 are not considered “but for” financial gains and do not violate ORS 244.040(1).
Under these Oregon government ethics laws, tips are likely “gifts” and subject to the “but for” test: They are financial gains that have economic value and are received as a gratuity, not as consideration in exchange for a service. As gifts, a public employee’s tips cannot exceed $50.00 per calendar year from each tipper unless the tipper does not have a legislative or administrative interest in the public employee’s decisions. While that rule may seem simple, government employers may find its practical application complicated: How will a government employer verify the amount of tips each public employee receives from each tipper? How will it determine whether a tipper has a legislative or administrative interest in its employees’ decisions? A possible solution is for a government employer to assume that every tipper has a legislative or administrative interest in public employees’ decisions and so apply the $50.00 limit across the board, without having to make case-by-case determinations. A government employer could also develop system for tracking and verifying tips, but that may prove to be administratively burdensome. A government employer could choose to be hands off and rely on its employees to accept or reject tips as required by ORS 244.025, but this runs the risk that employees will not comply with ORS 244.025 and, in turn, ORS 244.040(1), without oversight.
Consequences of Violations
The Oregon Government Ethics Commission (“OGEC”) investigates ethics complaints against public employees and can impose civil penalties on public employees who violate Oregon government ethics laws. The OGEC accepts complaints from the general public, so anyone could report a public employee for violating ORS 244.025 or ORS 244.040(1). Government employers do not have any duty to protect or defend a public employee in an investigation. Furthermore, government employers are not responsible for any penalties issued against a public employee. However, employees’ morale and the public’s perception of the government employer’s role in such a situation would not be good and it is best to avoid such situations through proactive policy decisions.