Rebate Disclosure and amp;Home Office Concerns

Meetings & Conventions: Planner's Portfolio January 1999
January 1999 PLANNER'S PORTFOLIO:

The Law & the Planner

BY JONATHAN HOWE


Rebate Disclosure&Home Office Concerns

M&C’s legal columnist responds to readers’ questions

Following are answers to readers’ legal questions. If you have a question that may be considered for future publication in M&C, please e-mail your concern to askhowe@cahners.com. We regret all questions cannot be answered.

Q: I am a planner for a nonprofit organization. We routinely add a rebate to our room rates, which is applied to our master account. We are about to start disclosing this information on our registration materials. Although we have no hesitation doing this, we must first inform our board of the rebates. Do you have any idea where I can find information to support the practice of adding rebates to rates? We would like to show our board that this is common and that it is not deceptive if disclosed.

Tracey Peranich
Conference Coordinator
Public Housing Authorities Directors Association
Washington, D.C.

A: You can assure your board (and supply them with this column) that rebates, are indeed, common. Furthermore, over the past year many hotels have begun demanding that meeting planners disclose to their organizations, attendees and clients the fact that a rebate will be paid. The primary concern for most planners is informing the person who actually is paying the bill just what that bill really covers.

It’s best to be very clear about how rebates will be used. Will the cash go to the sponsor to cover meeting expenses? Is it meant to defray costs of transportation to and from the convention center? Will it be used for future educational purposes?

A statement noted in registration and on-site collateral materials should read something like: “A portion of your room rate is being used to defray the cost of this meeting.” Also, if there is to be a rebate, be sure the facility contract is clear as to how the rebate will be paid or credited and what disclosure must be made.

Q: I plan events for a group of real estate offices and work as an independent contractor out of a home office. Since those offices don’t have a headquarters, hotels use my home address for correspondence purposes. Am I incurring any liability because of this? Do you have any alternative solutions?

Charlene Balosky
Independent Contractor
Novi, Mich.

A: The law would not impose any kind of liability on the basis of where mail is sent. If you feel uncomfortable, however, you could use a post office box for correspondence. You should also have separate e-mail and fax numbers from the residence’s numbers. That will help create a definitive line between your business and your home. Working out of your home brings up several other issues you should look into before converting that spare room. You may live where local zoning laws prohibit business or trade from being conducted in a residential area. Additionally, be sure you have appropriate local business licenses.

It’s also wise to check your homeowner’s insurance. It may not cover a home office or, for that matter, your business. It’s better to have separate insurance for business that includes comprehensive general liability and umbrella coverage (what’s not covered elsewhere is covered here), not to mention workers’ compensation, should you bring someone in to help you. The key here is to have an insurance agent who understands what you do.

Also, when you establish a home office, you need to determine the form the business will take. Are you the sole proprietor? Are you in a partnership? Or is your spare room an outpost of a corporation or association? In the first two instances, start-up expenses, overhead, hiring and insurance are all on your head. But if you have just relocated your office to your home but are still employed by a larger entity, be sure to get details in writing about who pays for what. For instance, will your employer be paying your phone bill, “rent” for your office and equipment costs? Will the employer be involved in your personnel decisions?

Be sure to outline a communication policy, including how often you will be in the main office, what times you will be available at home and how you will report your progress to your superiors.

Jonathan T. Howe, Esq., is a senior partner in the Chicago and Washington, D.C., law firm of Howe & Hutton, Ltd., which specializes in meetings, travel and hospitality law.