Holiday Parties and Employer Liability

With the holiday season upon us, many employers host a holiday party to boost morale and reward employees for their service. However, from a risk management perspective, employers should be aware of the liability they are exposed to, especially when alcohol is served, and the proactive measures they can take to protect their business and limit bad behavior before planning the annual company holiday party.

Employers should be aware that they can be held vicariously liable for any incidents that occur at or as a result of their company-sponsored holiday party. Whether the party takes place at the workplace or not because it is considered an extension of the workplace. Below are some guidelines for limiting your company’s liability when hosting a company-sponsored holiday party.

Alcohol
Serving alcohol at a company-sponsored holiday party can create significant legal liability for an employer. Alcohol consumption can lead to behavior from employees that they would otherwise never consider on the job and can blur the lines of what is appropriate and inappropriate behavior. The over-consumption of alcohol at the company-sponsored holiday party can lead to a variety of liabilities for an employer, from drunk driving to harassment.

By hosting the company-sponsored holiday party off-site, at a restaurant, hotel or other venue, employers can transfer some of the liability to the restaurant or other venue that is licensed to serve alcohol.

Employers should not make alcohol the focus of the holiday party and can prevent or limit employees from becoming intoxicated at the company-sponsored holiday party by:

• Limiting the number of drinks through drink tickets or a cash bar.

• Limiting the length of the party.

• Offering a variety of non-alcoholic options including food to counteract the effects of alcohol consumption.

• Limiting the alcoholic beverages served to beer and wine.

• Avoiding drinking games.

Attendance
Requiring employee attendance for the company holiday party raises the employer’s liability in the event something goes wrong. Therefore, employers should communicate to employees that the company holiday party is an optional event and not mandatory.

In addition, employers should be aware that under wage and hour laws, if attendance to the company holiday party is required, employees must be paid for the time they spend at the party. If the party is held during normal business hours employees are paid anyway. However, in those situations where the company holiday party is scheduled for after business hours, employees that attend must be paid, if attendance is mandatory. Further, non-exempt employees that work more than 40 hours the week of the holiday party, including time spent at the company holiday party, are eligible for overtime pay.

Harassment
As mentioned above, serving alcohol at the company-sponsored holiday party can lead to inappropriate conduct. Employers should be aware that they may be liable for harassment by their employees, if the unlawful conduct happened at the company-sponsored holiday party even if it was held off-site or occurred after hours. Employers should communicate to employees that the holiday party is an extension of the workplace and reminded that current company policies remain in effect at the event, even if it is not held in the workplace.

To help minimize the risk of employee misconduct at the company-sponsored holiday party, employers should:

• Avoid decorating with mistletoe.

• Require a dress code.

• Avoid inappropriate music and dancing.

• Avoid suggestive games.

• Avoid risqué jokes and/or gifts.

Employers should promptly investigate and enforce any complaints that are filed as a result of an incident that occurs at or after the company-sponsored holiday party.

Social Media
With the proliferation of smartphones, all it takes is a few clicks for an embarrassing moment of drunken hijinks captured at the company-sponsored holiday party to be posted on social media. These embarrassing moments can be more than an embarrassment for the employee, they can affect the reputation of the company once they are reposted and quickly spread to be seen by millions.

To minimize any social media mishaps at the company-sponsored holiday party, employers can instruct employees not to take pictures or record co-workers without their consent. Posting pictures and videos without consent on social media may violate the rights of privacy and publicity under state laws.

Transportation
Employers should always take steps to minimize the risk of drunk driving by employees if the company-sponsored holiday party involves the consumption of alcohol. Employers should arrange for transportation for employees to avoid any DUI-related incidents and not allow anyone that appears to be intoxicated to drive. Additionally, employers should have a plan for carpooling, selecting a designated-driver or offer vouchers for taxis or other transportation to prevent intoxicated employees from driving after the event. Again, even if the company-sponsored holiday party is not held at the workplace, the employer can be held liable for any injuries sustained as a result of intoxicated employees leaving the company-sponsored holiday party.

By following these guidelines employers can anticipate the problems that may arise at the company-sponsored holiday and take steps to avoid them.

If you need assistance with your business, please contact Lisa N. Thompson at Lthompson@hagehodes.com or call (603) 668-2222.

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