How can my company reduce legal risks when hosting an employee holiday party?

The holiday season is officially upon us, and with it comes the annual office holiday party and celebration. Have fun, but don’t forget that the rules still do apply.

When you’re working hard all year long, sometimes you need a little bit of help in boosting your employee morale. Office parties and social events, if they’re done right, are a great way to promote your company and reward the people who work for it.

If you don’t plan an office party carefully, you may end up getting sued. Nothing’s better than a late night knock on the door by the grim-faced state marshal bearing happy legal papers as a “gift”.

Make sure you don’t land your company in hot water. Let’s take a closer look at the potential legal pitfalls you’ll need to watch out for: harassment, accidents (from drinking), workers’ comp and wage and hour laws.

Anti-harassment Policy

First, review your handbook’s anti-harassment policy. Does it cover company-sponsored social events? If not, amend it. It would actually be pretty surprising if you still don’t have an anti-harassment policy.

Alternately, if a handbook policy won’t work, before the party is held, remind your employees that workplace policies still apply there, and cite examples of inappropriate behavior. If you have gift swaps planned, warn employees that gifts and holiday activities must still be work appropriate, and that offensive gifts or holiday decor are forbidden, even as a joke.

For example, playing “I Saw Mommy Kissing Santa Claus” at an acceptable volume isn’t a problem. Hanging mistletoe over the office door and pretending to be Santa kissing Mommy is.

Avoid the problem by telling all employees and supervisors ahead of time that, if your budget allows, the party will be open to their significant others (if they have them). Few people are going to get inappropriate if their significant other is watching right there to see everything. Set the tone early.

The Risk of a Drunk Driving Accident

While it’s true that the easiest way to cut back on the risk of a drunk driving accident is to ban alcohol altogether, that’s usually not the route that’ll go over best. Employees will resent that the lawyers “ruined” the party. If the party is going to have booze, hold it at a place where professional, trained bartenders will serve, and do control, the quantity of alcohol each person will be served.

If the party is at the office, and there’s alcohol on the menu, hire a bartender rather than self-serve. Instruct them to limit the number of drinks each person is served, and not to serve anyone who appears to be drunk. You can give everyone a limited number of drink tickets at the party’s start, and then the bartender can limit them based on that. You should only serve beer and wine.

The last resort is to arrange a ride home for anyone who needs one. Also, check your insurance policy and make sure the company has liquor liability insurance.

And if anyone’s hurt at the party, how much are you liable? Employees may think you’re responsible, and seek recourse in the workers’ comp system. Try to dodge the workers’ comp bullet by making it clear that attendance is voluntary and the party is, well, a party, not a work event. An off-site venue can help, but it’s not mandatory. Does the venue carry insurance? If not, find another venue. Emotional injuries are not covered by workers’ compensation. You should also avoid encouraging dance-offs. It’s Seinfeld-style dancing (think Elaine) that gets people hurt.

Wage and Hour Laws

According to the wage and hour laws, an employee is entitled to pay for hours worked. If you require an after-hours party, you have to pay employees to attend, even if it’s non-work related. If your event causes a non-exempt employee to surpass 40 hours in that week, they must receive overtime.

If you don’t want to pay, take these four steps to ensure that the party is not work-related:

• Come on out and say, “Attendance is voluntary.” You can have a great party and make it clear that showing up is not required.
• There should be no business-related speeches or any discussion about how the company did this year. Keep it non-work related.
• Don’t announce bonuses at the party.
• Don’t assign employees responsibilities at the party that you would otherwise pay them for. That means no employees acting as mistletoe police or dance-off police.

Don’t end up on the wrong side of the law this holiday season. Best wishes for you and yours.