Employer-sponsored activities

Nov. 1, 2004
A doctor decided to sponsor outside activities to increase the sense of "team" in the office. As a group, the team took a skiing trip, had picnics, attended plays, played softball, and enjoyed annual holiday parties.

Bent Ericksen and Tim Twigg

A doctor decided to sponsor outside activities to increase the sense of "team" in the office. As a group, the team took a skiing trip, had picnics, attended plays, played softball, and enjoyed annual holiday parties. His liability insurance carrier recently informed him that such activities can carry a significant financial risk. Looking to find a way to minimize his risks, but still promote team-building, he called seeking our recommendations. As the holidays approach, we felt it would be beneficial to share this information with all of you.


Many employers sponsor the type of activities mentioned above, and family members often are invited. Such activities can do a lot to bolster morale, enhance work relationships, and promote cooperation at all levels of the practice. But unless such activities are handled with care, the cost can be very high.

The key word here is "sponsor." If an employee gets hurt — either while traveling to or during such an event — the injury is likely to be considered work-related and reported as such to your Workers' Comp carrier. It is easy to understand your carrier's concern. If alcohol is consumed during the event — and alcohol is ruled to be the cause of an accident — it is likely that the employer would be held solely responsible. Thus, liability issues come into play with potential judgments and awards reaching the millions of dollars.

In one such situation, a sponsored holiday party was held at a hotel's private dining room. An employee, who had been drinking, fell and twisted her foot on the way to the restroom. She could not work for four weeks and the employer was forced to bear the cost of her medical treatment, plus her salary for the time she could not work.

In another example, a dental assistant was involved in a car accident on the way home from a company-sponsored event. She was severely injured and totally disabled. This resulted in the Workers' Comp carrier paying for a lifetime of total disability, which significantly affected the doctor's insurance premiums. The justification: The employer was responsible for her safety because it was associated with a company-sponsored event.

An employer may be held liable under various legal theories for any accidents or injuries resulting from such events. Liability can be based on injuries to employees or third parties.

With holiday celebrations and festivities upon us, does that mean that employer-sponsored events have to be completely curtailed? Not necessarily. In a survey taken in 2003 by the Bureau of National Affairs (BNA), the organization reported that 81 percent of small non-union organizations and 90 percent of small health-care establishments will have one or more holiday parties. About half of these will be sponsored at-the-office parties or informal luncheons and dinners.


To prevent potential problems, we suggest that certain precautionary steps be taken. These include:

* Inform staff that their attendance is completely voluntary. By doing this, any mishaps that occur during the event cannot be considered as having taken place within the scope of any work assignment.

* Employers need to realize that if staff members participate in planning the party or acting as helper-hosts outside normal work hours, the time is considered paid time. Even if staff members are willing to do so voluntarily, the labor department will consider their time to be work-related and, therefore, paid time. However, since they are not performing their normal work duties, the time may be paid at a "different capacity" rate. The rate must be no less than minimum wages.

* The most effective way to minimize liability is to not serve alcohol at your party. If you serve alcohol, establish a limit to help prevent too much consumption by any one person. You might consider hiring a professional bartender for that purpose.

* Do not allow anyone to leave and drive while intoxicated. Choose someone to act as the designated driver or offer to pay the taxi fare home.

* Have information handy regarding cab services, trains, or other convenient public transportation.

Being more aware and planning accordingly can help ensure that events are fun and achieve their intended purposes, while minimizing associated risks.

Bent Ericksen is the founder and Tim Twigg is the president of Bent Ericksen and Associates. For over 25 years, the company has been a leading authority in human resources and personnel issues, helping dentists successfully deal with the ever-changing and complex labor laws. Both authors are members of the Academy of Dental Management Consultants. To receive a complimentary copy of the company's quarterly newsletter or to learn more, contact them at (800) 679-2760 or at www.bentericksen.com.

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