Human Resources Articles
Holiday Parties and Employer Liability
Employers muse over how to celebrate the year-end holiday season and how to thank employees for their contributions during the year. Aside from the opportunity to network in a non-work environment, there are legitimate issues to be considered: what kind of nonreligious holiday celebrations should organizations provide? What are the legal implications involved in holiday parties, particularly in regards to the use of alcohol?
Noteworthy Stats
In their 1998 Holiday Practices Survey, The Society for Human Resources Management (SHRM) found that:
- More than 8 out of 10 organizations surveyed (83%) host a holiday party for their employees.
- Organizations with fewer than 200 employees (90%) were more likely to throw a holiday party than those with 200+ employees.
- Only 17% of respondents reported that their organizations do not host a holiday party for employees.
Office parties are alive and well – and so is the use of alcohol in this social setting:
- 53% of respondents indicated that all types of hard and soft alcohol are served at parties. Only 29% stated that their organizations serve no alcohol.
- 30% of respondents whose organizations offer alcohol indicated that a cash bar is used at parties, and 28% responded that the first alcoholic beverage at their parties is free (with the rest available through a cash bar).
- 42% of organizations that served some type of alcohol at their work holiday parties did not charge for it.
Celebrating the holiday season with your employees requires taking a few precautions. While judicious preparation may not eliminate all potential liability, but it can help make events safer and lessen some of the hidden costs involved in employer-sponsored events.
The Law of the Land
Under traditional common law, a supplier of alcohol was not liable for injuries caused by party participants who drank. However, in many states these laws have changed to reflect "social host" liability, which makes any alcohol server responsible for injuries and damages caused by intoxicated persons. For example, employers are not immune to lawsuits arising from post-party auto accidents in which alcohol played a role.
Another potential area of liability pertains to Workers' Compensation, particularly the "Exclusive Remedy" provision of the Workers' Disability Compensation Act. This act usually protects the employer when an individual is injured in a work-related incident. However, this protection does not apply to most company party situations, because the injury would have been "incurred in the pursuit of an activity, the major purpose of which is social or recreational." Such injuries are not covered by workers' compensation.
There's one more trouble area as well. Party attendees who are the victims of unwanted advances or other harassing behavior may sue for sexual harassment. It's a sad but true fact that under the influence of alcohol, at a social event after regular working hours, employees are often less careful about their conduct.
Setting Boundaries
Are holiday parties too risky? Not at all. The following suggestions will help minimize your company's exposure to liability, while enabling you to convey the event's true spirit and intent.
- Set a tone of moderation before holiday parties through interoffice memos or meetings, reminding employees to be responsible. Discourage excessive drinking, and indicate what measures will be taken to ensure a safe event. Make sure employees know "when to say when."
- Assess the ability of attendees to get home safely. Arrange transportation for intoxicated employees, either by having designated drivers or by using a transportation service.
- Hire a separate caterer to serve alcohol. Instruct the caterer not to serve anyone who is visibly drunk, and to notify an appropriate person if insobriety is observed.
- Consider a voucher system to limit the number of drinks served, or serve alcohol for only a short period.
- Don't require employees to attend as a condition of their employment.
- Schedule events on weekends or after normal working hours.
- Don't take attendance at the event.
- Investigate all complaints. Failure to respond to any single complaint can lead to greater liability than the alleged misconduct. Don't dismiss complaints associated with the company's holiday party without conducting a thorough investigation.
- Make sure there are plenty of non-alcoholic beverages available.
- Provide discount rooms if the party is held at a hotel.
- Don't pay for drinks. When employees pay for drinks out of their own pocket, they're not as quick to buy them.
- Hold the party at an offsite location.
- Make the party a family affair; include spouses and children.
- Designate certain supervisors or managers to oversee the event. Have them watch for employees who become "too friendly" with other people at the party.
Holiday parties represent an interactive venue for employees and employers and certainly shouldn't be written off because of a few potential challenges. Plan ahead with these items in mind to ensure a successful and pleasant event for all.