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If you are asked to lunch by one of your employees, and discuss work-related matters, who should pay for the lunch?

April 2005, Article 8

Dear Office-Politics,

If you are asked to lunch by one of your employees and discuss work-related matters, who should pay for the lunch? This is a question I need to answer for a school presentation.  I have looked over most of the information in your site and was unable to find any information on this question.

Student in Need

Dear Student in Need,

I'm not sure whether you're truly a 'student in need' since this seems like common sense and something you could figure out for yourself with a smidgen of analytical thought and very little effort. But since I enjoy voicing my opinion here goes...

If you ask me to lunch, it is conventional expectation that you would pay. Unless you stated in advance that it's 'dutch treat'. If the question of who is paying is left 'up in the air', that awkward moment will arrive when the meal is finished and the restaurant check lands on the table. One person pretends to reach for it... or excuses themselves to the restroom to avoid paying for it. Being vague about who is paying is pretty silly and not conducive to fostering good relationships. But we're in a gray zone where it's mostly about manners, and friendliness as to who wants to pay. There are no hard and fast rules. If we're good friends we could decide to take turns treating each other to lunch. If you ask me to lunch and then hand me the bill, I'd be annoyed -- but I'd pay the bill and make a mental note not to accept your 'invitations' again.

In this case we are dealing with the interests of a company and the use of an expense account. In your question, an employee asks Management (the Executive) out to lunch. What is the underlying purpose of the lunch? Is it business? Is it to personal, e.g. 'getting to know one another better' or asking for a favour like 'my son wants a summer job' or is it covertly 'romantic' (!!)?

And very importantly: Is the Executive an employee or an owner of the company?

Well, whether or not the Executive is an employee or an owner of the company, they still need to be fiscally responsible in declaring business expenses. At the end of the day they are answerable to the tax department, and possibly to shareholders (even if they are a privately held company).

So your question really revolves around whether or not the purpose of the lunch was primarily business or personal. The Executive needs to decide if the lunch is a reasonable and legitimate business expense that: i) the company can afford, and ii) that he/she has the authority to decide on.

If the tax department was peering over their shoulders would they agree that it was a business expense?  Just because work-related matters were discussed doesn't necessarily mean that the Executive is obligated to pick up the tab. Imagine that I'm the owner of the company and you ask me to lunch. I quickly discover, to my surprise, that the purpose of your invitation is to ask me for a favour (e.g. a summer job for your son). But then you (as the employee) ambush me into paying for lunch as a business expense. I'm left scratching my head why I should pay when YOU asked me out, and expect ME to do you a favour!

Generally speaking the person who extends the invitation is seen to be responsible for the payment of it. As a business owner myself, it all comes down to the purpose of the lunch. And a gentle reminder that in life there are 'No free lunches' and life is a 'two-way' street. There is always a trade going on. Even if it is just goodwill. Like me writing this answer for your presentation. Let me know what mark 'we' get... I always did well in school so I'll take some pride in it.

Thanks for writing to Office-Politics.

Cheers,

Franke

Franke James, MFA
Creator, The Office-Politics Game

Feedback from Student-in-Need
The information was extremely helpful.  I found your beginning statement,"let's use a little common sense" very humorous.  I thought it was a good intro, it made me laugh.  Thank you so very much for responding to my question.