Does your company do business with state and local governments? Before you say “no” perhaps you should check with the contracting team to make sure. Then ask if they intend to begin negotiating to sell your goods or services to state and local government entities. If so, start paying attention to pay to play restrictions.

Pay to Play restrictions on political contributions mean that your organization, associated political action committee, certain individuals within the organization and sometimes the spouses of those individuals are prohibited from making political contribution in jurisdictions if your organization has or intends to have government contracts. Some jurisdictions prohibit political contributions within a certain time period prior to the contract while others prohibit political contributions while the contract is in effect or the candidate receiving the contribution is still in office. Each state has their own separate pay to play rules which makes navigating the pay to play waters extremely complicated and dangerous.

As pay to play restrictions become more common and the implications of non-compliance become more serious, organizations must pay attention. Pay to Play regulations are in force in over half the states in the country and affect almost every industry. Punishment ranges from fines to loss of the contract and your organization may be prohibited from participating in contracts for a specified time period after the pay to play violation.

Compliance with pay to play rules requires open and frequent communication between “Covered Individuals” within the organization, the Contracting Team, the Government Affairs team, and the Compliance Team. Even the smallest political contribution to a candidate that did not win the primary election can cost your company a significant amount of money between the fines and lost business.

You can hire a full-time staff to track your political contributions and contracts or you can hire the campaign finance compliance experts at PASS to do the work for you. The PASS Compliance Team monitors pay to play rules where laws currently exist and in states that do not currently have pay to play restrictions.

PASS offers a disbursement compliance service where your PASS Compliance Manager will review your disbursements for pay to play requirements before you make the contribution. This allows your organization to know the rules before you make the contribution and reduces the risk your organization will be excluded from potential business opportunities.