An Employee Purchase Agreement

by Eric Novinson ; Updated September 26, 2017

An employee purchase agreement, or an employee purchase program, allows an employee of an organization to purchase products at a discount. An employer frequently receives a discount from the retail price when it buys work supplies, because the employer purchases a large quantity of products at once. The employee purchase agreement allows an employee to buy supplies at this discounted price.

Custom Products

A retailer may create a special store for customers who qualify for an employee purchase agreement. This store may include products that include custom features for employees of the organization, such as computers that meet the hardware requirements to run scientific programs that the employees of a university need to perform job tasks at home.

Employee Discount

A retailer may also offer an employee purchase agreement to its own employees. This type of agreement provides products at an employee discount, which may be even cheaper than the price that the retailer offers on bulk purchases to other companies.

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Identification

The employee needs to provide additional identification information to the retailer to prove that he is a current employee of the organization. The retailer may require a photocopy of the employee's work identification card or a payroll stub. The employee may need to access the retailer's website from a special link that the retailer provides, or enter a password that the employer provides. If the employee buys products at a retail outlet, the employee may need to register his credit card with the retail store and use the registered card to make a purchase.

Qualifying Items

An employee purchase agreement may only apply to certain items. For example, a retailer may offer a discount on computers and printer paper, but charge the employee the full retail price for food. The University of Tennessee Board of Regents has negotiated an employee purchase agreement that provides a discount only for products that the university itself receives a bulk discount on.

Classification

An employee purchase agreement is considered to be a benefit that the employer provides, not a gift from the retailer, according to the Office of Government Ethics. Purchasing products under the employee purchase agreement is optional, so the employee does not owe any additional taxes because she can purchase products at a discount, which is an advantage in comparison with other benefits that an employer can offer that are taxable.

About the Author

Eric Novinson has written articles on Daily Kos, his own blog and various other websites since 2006. He holds a Bachelor of Science in business administration from Humboldt State University.

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