my boss wants to add to our paychecks with his personal money

A reader writes:

I work for a local government office that is being affected by the federal chaos. We currently have a hiring freeze and expect to lose several key positions when Congress finally passes a budget. Best case scenario is that the dozen or so positions we have open will be eliminated. Worst case is that one of our largest departments will be shuttered and another will be severely downsized. My team is not federally funded but is taking on a lot of the work previously done by the vacant positions.

My grandboss, who came to us from the private sector just this year, feels bad that he can’t give us raises or bonuses to reward us for all the extra work we’re doing. He wants to start personally Venmo’ing us an extra couple hundred dollars each month. While I appreciate the gesture, this feels inappropriate to me. At the same time, I really could use the money — my partner and I have been doing a lot of gig work on the side to help pay down our debt. Is there anything legally wrong with accepting this money? Could it come back to bite me in some way?

Yeah, it’s not really appropriate — but that’s more on your grandboss than you. If it’s going to cause problems, those problems much more likely to be for him than for you. In general, employers don’t want managers paying people from their own personal money, even if they want to, for a whole bunch of reasons: (1) it removes their ability to guard against things like illegal discrimination (for example, if he were paying you extra but not someone doing similar work who was a different race, sex, or religion), (2) it creates weird issues of loyalty toward the manager over the employer (and creates potential conflicts down the road if there are issues with the manager you should report but hesitate to because he was so generous with you, or if it creates pressure for favors he shouldn’t be asking for), (3) the manager shouldn’t be using personal funds to alter the employer’s resource allocation decisions (and it masks the true cost of having that work done / retaining people, although that’s murkier given the current situation with government work than it is elsewhere), and (4) it has tax implications for everyone if they want to do it legally.

A good litmus test: would he feel you need to hide it from higher-level management? If so, that’s a sign it’s a problem.

That said, on your end of things, the only legal issue is a tax one; the money should be reported and taxes withheld, and it likely won’t be. (That’s required even though it’s a “gift” from him; it’s still money you’re being paid for doing your job.) In theory, that could come up at some point, although it probably won’t. Still, it would be smart to set aside some of the money for taxes. Also, you should look at your ethics policy, which might explicitly prohibit accepting it.

Beyond that … it’s really up to you if you feel comfortable with it. It’s easy to say “don’t accept it,” but I think most people would understand why you might choose to.

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