Best practices for employer-sponsored events

Nov. 1, 2010
Holiday parties: to do or not to do? That is the question every year about this time.

by Tim Twigg and Rebecca Crane

For more on this topic, go to www.dentaleconomics.com and search using the following key words: employer-sponsored events, harassment, employee compensation, Tim Twigg, Rebecca Crane.Holiday parties: to do or not to do? That is the question every year about this time. And if you "do," then there are the issues of what, where, when, how, and who?

On one hand, holiday parties can be a great way to bond with staff and build teams. On the other hand, they are fraught with potential legal issues, risks, and concerns.

Office parties aren't the only type of employer-sponsored event, of course. Some employers like to take their staff on trips to Hawaii, have company picnics, or participate in teambuilding programs. It doesn't matter what the event is; they all serve a good purpose and all can - if not thought through and handled correctly - result in problems for the employer.

It's important to recognize that although employees may be off the clock during the event, the employer may still be responsible for actions that occur during or after the event. Furthermore, depending on the event, these actions could result in discriminatory, harassment, and/or liability issues if not handled appropriately. Despite the potential negatives, employer-sponsored events do carry many positive benefits. Just be aware of the concerns and manage the risks appropriately.

Holiday parties

Several issues may materialize when it comes to holiday parties ... beginning with the fact that the holiday you plan to recognize is not one that your employees believe in. This is becoming more and more prevalent as the workforce becomes more diverse. While you may be thinking, "That's no big deal. It's my company. I'll do what I want," issues of religious discrimination and/or harassment can become a liability for the unsuspecting employer.

The best way to avoid allegations of discrimination is to refrain from using religious descriptions or decorations that represent a particular belief. For example, consider calling the celebration a "Holiday Party" or a "Celebration of Seasons" rather than a "Christmas Party." If your main intention for the party is to reward employees for their hard work throughout the year, you may also want to consider celebrating during a different time of the year. Sponsoring events such as summer barbecues or a day at an amusement park, for example, are great ways to show employee appreciation while avoiding any potentially conflicting religious connotations.

Another problem: alcohol. Any time alcohol is available at holiday parties, the potential for negative employee issues increases. Obviously, not serving alcohol at the party would likely solve that problem, but many employers still opt for cocktails. So, if you plan to serve alcohol at your party, consider limiting the risks by utilizing the following tactics:

  • Take the focus off of drinking. Promote the other aspects of the party, such as the menu and entertainment, so employees can look forward to the food and dancing rather than the liquor selection.
  • Accept cash only, or tickets. Require employees to pay for drinks. Have unlimited free nonalcoholic beverages available for employees who don't drink and to encourage drinkers to save their money. Or consider using a drink ticket system in which each employee is entitled to two drinks on the house and no more.
  • Time it right. Choose when to have alcohol available, either before or during dinner only. If you choose to have the bar open during the entire party, always make sure it closes at least one hour before the party ends.
  • Choose alcohol and food wisely. Beer and wine are better than hard liquor, given the relative alcohol content. Limit the amount of salty, greasy, or sweet foods because they tend to increase thirst.
  • Invite families and/or clients and vendors. The presence of employees' family members or other work-related colleagues can encourage employees to be on their best behavior.
Although you have the best intentions for limiting alcohol consumption, there is still the chance employees may get out of hand with their behavior or be too impaired to drive. Here's how to prevent those situations from happening:
  1. Designate a person(s) to monitor employees' behavior. Items to look for include: how much employees drink and whether they have a safe ride home; employee interactions, especially those who become "too friendly" with each other or if tempers rise; any other employee activities that may be dangerous to themselves or others.
  2. Cover all transportation bases by: arranging for a taxi or car service for employees; asking employees to designate a driver ahead of time if they plan to drink; suggesting that employees carpool with each other so that those who drink can ride with those who don't. Just be careful not to make employees feel like this is a requirement.
  3. Prepare for the possibility of pre-partying. It's safe to assume that some employees will start the party on their own before they arrive at the actual party. To minimize that possibility:
    • Impose a rule that employees who arrive drunk will not be admitted to the party, and a pre-designated driver (e.g., an employee volunteer or taxi) will take the intoxicated employee home.
    • If the party is after work, arrange for free transportation from your practice to the party site and back so employees don't have the chance to hit happy hour beforehand.
    • Remind employees about your company's office alcohol and substance abuse policy and the rules of behavior, public intoxication, fighting, harassment, etc., that will be enforced at the party. These reminders can be done via e-mails or memos a few days before the party. Trying to explain this after the fact to an employee who is already drunk when they arrive will not work.
Other employer-sponsored events

Many employers sponsor outside activities to enhance teambuilding. For example, employers may sponsor ski trips, picnics, theater events, softball, or trips to exotic places such as Hawaii. While this can bolster morale and enhance working relationships, the employer could be liable if something bad happens during the course of the activity.

The key word here is "sponsor." If an employee gets hurt, either while traveling or during such an event, the injury is likely to be considered work-related and as such reported to your workers' comp carrier. Here are some examples:

  • If alcohol is consumed during the event and is ruled to be the cause of an accident, it is likely that the employer would be held responsible.
  • If an employee who had been drinking falls and twists his/her foot on the way to the restroom and can't work for four weeks, you may be forced to bear the cost through your workers' compensation carrier, or the cost of medical treatment plus salary for lost work time.
  • If an employee is involved in a car accident on the way home from a company-sponsored event and is severely injured and totally disabled, the workers' comp carrier could be paying for a lifetime of total disability, which would significantly affect your insurance premiums.
An employer may be held liable for any accidents or injuries resulting from employer-sponsored events. There are many ways to minimize your risk. For example, eliminate alcohol and inform employees that attendance is completely voluntary and free of any expressed or implied pressure from management.

Employee compensation

Staff members are often intimately involved in planning the details of the party. If your staff participates either in planning the party or acting as helper-hosts during the party or outside normal work hours, that time is considered paid time. Even if your staff is willing to do so voluntarily, the labor department will consider their time be work-related and thus paid time.

Furthermore, if participants who attend the event are either required to attend or led to believe their performance standings will be damaged by nonattendance, then compensation is required. Be sure to inform those who are attending the event that they are doing so voluntarily and will not be paid unless they are performing assigned duties.

Harassment complaints

In some unfortunate cases, the good intentions are significantly dampened when the employer receives a sexual harassment complaint after the employer event occurred. In these cases, the employee wants to hold the employer responsible and, all too often, the employer will be held accountable. How can this be prevented? The following should help reduce exposure to these claims:

  • Remind employees about general standards of conduct.(Call for a sample copy of our Unprofessional Conduct policy.)
  • Reissue the company policy on anti-harassment and have everyone sign an acknowledgement of receipt. (Call our office for a sample copy of our Anti-Harassment policy.)
  • Clearly outline the consequences that will be taken if behavior is unacceptable.
  • Encourage appropriate behavior to ensure everyone has a good time, and lead by example.
  • Do not serve alcohol and/or minimize the amount of alcohol served. Inappropriate behavior is more of a potential when alcohol is involved.
If you do receive a harassment complaint, take it seriously and act on it immediately. It will not serve you to ignore the complaint and pretend it didn't happen or that it isn't your problem. An employer always has an obligation to keep employees safe and free from unacceptable behavior, even when it's an after work, off-site event.

Our aim is to help you minimize potential liability for discrimination, sexual harassment allegations, workers' compensation claims, or other liability that may arise when caution is not exercised. Consider that any social setting may reduce inhibitions and relax a sense of professional behavior. Unfortunately, in today's litigious climate, employers need to take certain precautions to avoid any embarrassing or possibly very costly consequences during employer-sponsored events.

Tim Twigg is the president and Rebecca Crane is a human resource compliance consultant with Bent Ericksen & Associates. To reach them, call (800) 679-2760 or visit www.bentericksen.com.

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