It’s the time of the year again when people enjoy fun times and holiday parties. To help you get ready I am sharing a checklist to help employers minimize the legal risks presented by employer-sponsored holiday parties. 

This checklist will address the following concerns:

• Sexual harassment prevention
• Avoiding harms related to alcohol consumption
• Minimizing the risk of employer compensation liability
• Preventing wage and hourly claims by non-exempt employees for overtime pay

Let’s be honest, a festive atmosphere combined with alcohol consumption can create the potential for inappropriate behavior and may lead to an employee or third-party claims based on injuries suffered during or after the event. So, while you’re planning your festive event, I want to give you a few things to keep in mind.

Sexual Harassment Prevention

As a responsible employer, you should ensure that employee policies or expectations are set ahead of your holiday party or event. How to do this? Here are some tips.

Definition of sexual harassment

To be clear, any person of any sex, gender, age, and race can be a victim of sexual harassment. Sexual harassment creates a hostile work environment and is illegal. Sexual harassment includes any unwanted verbal or physical sexual behavior. This can range from sexual comments about a person’s clothing, anatomy, or looks, to very serious acts that qualify as assault or rape.

Amend harassment policies.

You can amend your harassment policies in your employee’s handbook to specifically address employer-sponsored social events. You may also set expectations via email or team meetings. Of course, providing something in writing is always a great rule of thumb. 

Outline specific unacceptable behaviors.

In particular, employers should consider outlining specific unacceptable behaviors at holiday parties or social gatherings. One good example is incorporating risque or adult-themed gift exchange would be inappropriate. 

Another would be the potential of creating romantic or sexually-charged situations, such as hanging a mistletoe. Now, you may think that your employees won’t use the mistletoe, but it might create room for comments that would rise to the level of sexual harassment.

Invite third-party guests to your event.

Although adding more guests means additional cost to your event, it might inspire your employees to be more reserved. They’ll be less likely to engage in offensive behavior because they’re accompanied by other significant people or unfamiliar faces.

Avoiding Harms Related to Alcohol Consumption

Potential liabilities associated with alcohol consumption at employer-sponsored events are highly present. However, an employer’s potential liability for injuries caused by employees consuming alcohol during holiday parties may vary from state to state.

In addition to common law theories of negligence, there’s a law called “social host” or “dram shop liability.” This law holds alcoholic beverage providers liable for injuries caused by intoxicated individuals (or employees). Social host and dram shop laws vary from state to state, and different states approach it by providing clear statutory grounds in which employers may be liable.

So, what’s the best way to reduce the risk of alcohol-related incidents? Here are some things you can do:

Consider holding the event at a restaurant or other off-site location. 

If you want to hold your holiday event at bars, consider choosing establishments with liquor licenses. These establishments have professional bartenders who know how to respond to guests consuming excess alcohol. 

Hire a professional bartender or caterer. 

If you want to have the social gathering onsite, you may consider hiring a professional bartender or caterer. In doing so, you may want to confirm that the caterer carries liability insurance. Of course, you should instruct bartenders or caterers not to serve drinks to anyone who’s visibly intoxicated. Employees shouldn’t also be permitted to stand in as bartenders or serve drinks to their co-workers.

Limit the amount of alcohol to be served. 

Say your holiday party won’t be fun without a little spice of alcohol. As a responsible employer, you can at least limit the amount of alcohol to be served. You may also control alcohol consumption by providing several drink tickets or entertainment to shift the event’s focus away from alcoholic drinks. To do this, try to have a mix of alcoholic and non-alcoholic beverages and don’t forget to serve lots of food. 

Provide alternative transportation. 

As an employer, you may consider providing transportation for your employees, especially those most likely to be intoxicated with alcohol. For example, you can give Uber gift cards or Lyft gift cards to reduce the likelihood of driving home under the influence of alcoholic drinks. 

Encourage your employees to look out for one another. 

Encouraging your employees to notify the management if someone from your company appears to be overly intoxicated is a good practice for team collaboration. To be more organized, you may designate some managers or team supervisors as spotters.

Determine if you can purchase insurance covering the dram shop law. 

As an employer, it’s best to determine whether you can purchase insurance covering the dram shop or liquor law liability. You should review your existing coverage before buying a new policy because a comprehensive general liability policy may be enough, but there are event dates of liability policies. As mentioned above, there may be liability policies specifically covering dram shop or liquor law liabilities, especially if you’ll have multiple social gatherings. 

Minimizing the Risk of Employer Compensation Liability

Although the law varies from state to state, the workers’ compensation benefits may be available to employees injured during or because of an employer-sponsored event. To minimize this risk, disassociate the holiday function from your employees’ jobs. This can be done by letting them know there’s no business purpose for the event, and attendance isn’t mandatory. This is also helpful if you’ll host the event off your premises. 

Like the discussion on alcohol consumption, you should confirm that services or venue providers are properly licensed. Remember, having third-party licenses reduces your risk because these licensed establishments or caterers are subject to inspection, and they generally come with additional insurance coverage. 

Preventing Wage and Hourly Claims by Non-Exempt Employees for Overtime Pay

Again, when holding a holiday party or event, inform your employees that attendance is voluntary. Hold the party outside of normal business hours and refrain from engaging in any business matters during the event, including business speeches or distribution of bonuses or performance awards, to avoid confusion between work and social gatherings. 

Most importantly, avoid asking your employees to perform any specific tasks or functions at the party for your benefit (as the employer). For example, no worker should serve alcohol during the event to avoid claims that the non-exempt employees were required to work off the clock. 

Final Thoughts

I hope you found the above tips helpful as you plan your next employer-sponsored holiday party or event. If anything else, always aim to create a safe and fun holiday season for you and your team.