Employer-sponsored holiday parties are a good way to maintain employee morale and allow employees to bond, but they can also result in unexpected legal liability.
Holiday parties often involve alcohol. And alcohol, which has a tendency to lower inhibitions, may result in inappropriate or irresponsible behavior on the part of your employees, in turn generating legal liability for you.
While certainly not a festive thought, there are definite steps you can take to reduce exposure without scrapping the holiday party altogether. Below is a checklist to help employers limit those legal risks.
How to Limit Alcohol-Related Incidents
Employer liability for injuries caused by employees who consume alcohol at company functions varies from state to state. Despite those variations, where an alcohol-free party is neither practical nor desirable, there are steps employers can take to reduce the risk of alcohol-related injuries. For example:
- Hold the event at an off-site location, such as a restaurant or bar, where professional bartenders, who know how to respond to excessive drinking, will serve alcohol.
- Or, for onsite parties: hire professional bartenders, waiters, or caterers to serve alcohol; ensure that the hired staff carry liability insurance; and instruct hired staff not to serve anyone who is visibly intoxicated.
- Ensure that there are non-alcoholic drinks and plenty of food available at the party to avoid people becoming intoxicated.
- Limit the amount of alcohol that can be consumed by providing drink tickets and/or setting a cut-off time for alcohol service.
- Schedule the party to occur during the day, when employees will be less likely to drink to excessive levels, if at all.
- Hold the party on a “school night.” Employees who know they have work the next day will be less likely to overindulge in drinking.
- Provide a variety of activity-based entertainment (such as dancing, trivia, and other games) so that drinking is not the focus of the party.
- Arrange transportation for employees leaving parties where alcohol is served.
How to Prevent Claims Related to Harassment and Discrimination
Employees often act less reserved at holiday parties than they do at work. Add alcohol to the mix and the potential for inappropriate behavior increases. Steps employers can take to reduce the likelihood of harassment and discrimination include:
- Allow employees to bring significant others or guests. Employees tend to be more reserved around their significant others, as well as around people they’re not familiar with, reducing the likelihood of offensive conduct.
- Forego hanging mistletoe. Holiday customs – even in a festive atmosphere – should be appropriate to a workplace. By the same token, be sensitive with holiday decorations and invitations as well. Not all employees celebrate Christmas, and employers should make sure everyone feels included by remaining religiously neutral.
- Conduct a refresher of your sexual harassment, anti-discrimination, personal conduct, safety, and dress code policies with employees in advance of any holiday parties, and ensure that employees understand that management will not tolerate any misconduct at the party.
How to Prevent Wage-and-Hour Claims by Non-Exempt Employees
As discussed in a prior post titled Pay to Play: Compensable Time and Employer-Sponsored Recreational Activities, some employees may actually be entitled to be paid for their attendance at employer-sponsored holiday parties. If your business doesn’t plan on paying non-exempt employees for their attendance at the holiday party, ensure that:
- Employee attendance at the party is entirely voluntary.
- The holiday party is held outside of the regular work day.
- No business is conducted at the party. This includes speeches about business matters and distribution of bonuses.
- Employees are not expected to (and do not) perform any functions at the party for the benefit of the employer.
Happy holidays (in advance), and best wishes for litigation avoidance this holiday season and in the New Year.