Protect Your Business From Unintended Holiday Party Related Liabilities

Holiday Party Celebration

‘Tis the season of the business holiday party. While holiday parties can be very enjoyable and beneficial for employee morale, they can also create unintended liabilities for employers. The good news is that with a little forethought and planning, those potential liabilities can be minimized.

The potential liabilities from holiday parties general consist of sexual harassment, alcohol related harms, workers compensation claims, and wage and hour claims.

Prevent Sexual Harassment

Given the festive atmosphere and likely consumption of alcohol, it should not be surprising that holiday parties can present the possible risk of sexual harassment. To minimize that risk employers should:

• Ensure that their policies specifically address employee conduct at employer sponsored social functions.

• Keep customs appropriate to the work environment (i.e. do not hang mistletoe).

• Consider allowing employees to bring spouses or significant others to the event.

Reduce the Risk of Alcohol-Related Accidents

Employers can be held liable for injuries caused by employees who consume alcohol at employer-sponsored events under various legal theories. In order to minimize the risk of such a claim, employers should:

• Hold the holiday party off-site, or if the party is held on-site, hire a professional bartender or caterer that carries appropriate liability insurance.

• Limit the amount of alcohol that will be served.

• Provide alternative transportation from the event.

• Encourage employees, or designate a higher level employee, to be on the look out for intoxicated coworkers.

Avoid Workers’ Compensation Claims

Depending on the jurisdiction, employees who are injured at employer-sponsored events, may be entitled to workers’ compensation benefits. To avoid such claims, employers should:

• Ensure that employees are not performing business functions at the event.

• Hire only licensed vendors.

Prevent Wage and Hour Claims

If not handled correctly, a holiday party could entitle nonexempt employees to compensation for their time spent attending the party. To avoid making a holiday party “compensable time,” employers should:

• Inform employees that attendance at the party is voluntary.

• Hold the party outside of normal business hours.

• Refrain from engaging in business or business related activities during the event.

The foregoing steps are relatively simple and easy to implement and go far in reducing unforeseen liability from what is supposed to be a happy and morale boosting event.

If you have any questions about your business’s employment policies or practices, please contact us at (201) 345-5412 or through our online scheduling calendar to set up a complimentary consultation.