Planning a year-end party? Tips for keeping liability to a minimum
Issue:

The end of the year is fast approaching and it’s once again time to make plans for the office party. Are there special liability concerns with office parties? What can be done to lessen an employer’s potential liability?
Answer:    

There are two possible areas of liability that may occur during office parties:

  • Employers may be held liable for the acts of employees during the party.
  • Employees injured during the party may be awarded workers' compensation benefits.

While a few state legislatures have enacted “dram shop laws,” under which only those who sell alcohol for profit can be held liable as a supplier of alcohol, employers should note that there are a growing number of situations where courts are holding employers liable for alcohol-related injuries.

Tips. To keep your organization’s potential liability at a minimum when hosting social events for employees:

  • Make attendance voluntary. Avoid any direct or indirect pressure to attend.
  • Do not keep records or lists of people who attend or don't attend.
  • Avoid holding the party during regular working hours. If it is held during regular working hours, during lunch for example, employees should not be on the clock.
  • Hold the party off site.
  • Do not deduct the cost of the party as a business expense.
  • Do not invite customers.
  • Do not hand out awards or bonuses at the party.
  • Do not make speeches or otherwise conduct business at the party. Make the party a strictly social event.
  • Do not refer to past celebrations (e.g., 10th annual holiday party) or otherwise label the celebration as a recurring event. You don't want your employees to think that the party is a regular benefit of employment.
  • Include employees in planning and funding the party.
  • Make sure you have a well-publicized inappropriate behavior policy that applies to all company activities and employees.
  • Update company policies relating to alcohol. Your policy should prohibit alcohol from being consumed on company premises during or after working hours. It should also prohibit the use of company funds to purchase alcohol and bar supervisors from providing alcohol to employees.
  • Do not serve alcohol. But if you must:
    • Communicate in advance that excessive alcohol consumption will not be tolerated.
    • Have plenty of nonalcoholic beverages and food.
    • Stop serving at a specified time well before the scheduled end of the party.
    • Inform all servers (including caterers) to not serve intoxicated individuals.
    • Provide alternate transportation.
    • Provide discount rooms if the party is held at a hotel.
    • Do not pay for drinks or use a drink-ticket system to pay only for a limited number of drinks.

Source: CCH Human Resources Management, HR Practices Guide
[ Return to top of document ]