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By: Lexis Practice Advisor Team
This checklist provides best practices and considerations for private employers when hosting holiday parties for their employees. While there are benefits to holiday parties, such as employee camaraderie and improved morale, there is also a significant risk of inappropriate behavior. Such behaviors can negate the advantages of the event and lead to employer liability. This checklist addresses concerns that are common to most jurisdictions but does not cover all potential state and local law distinctions.
One of the most significant risks of a holiday party is an employee making inappropriate physical advances upon his or her co-workers. An employee on the receiving end of these advances could pursue a claim for sexual harassment. Taking the below steps will help to ensure the holiday party does not subject the employer to liability.
Employee alcohol consumption is a common source of employer liability at holiday parties. Limiting and monitoring the service of alcohol allows the employer to minimize risk.
Depending upon state law and the applicable facts, an employee injured in connection with the holiday party may be able to pursue a workers’ compensation claim. Take the following steps to minimize the risk of liability.
While issues involving alcohol and harassment likely comprise the majority of claims resulting from employer-sponsored holiday parties, other difficulties may arise. One such difficulty—discrimination claims—are avoidable with proper planning.
Unless certain safeguards are in place, an employer may owe wages to non-exempt employees for time spent at the holiday party. Consider the following measures to minimize the threat of wage and hour claims.
The risks posed by a holiday party are magnified by social media, where embarrassing or inappropriate behavior can easily become public knowledge. However, an employer’s ability to regulate its employees’ social media use is limited by the National Labor Relations Act (NLRA), which prohibits employers from interfering with employees’ right to engage in concerted activity related to the terms and conditions of their employment. Consider the following measures to minimize the risk of social media abuse without running afoul of the NLRA.
For more information on social media policies and management, see the forms and practice notes available in Navigating Social Media.
An employer should not invite independent contractors to a holiday party as doing so is evidence that an independent contractor is misclassified and should be considered an employee. For more information on maintaining the non-employee status of independent contractors, see Checklist – Best Practices for Maintaining Independent Contractor Status.
Before announcing the holiday party, the employer should review its insurance coverage with its insurance agent or broker to confirm that it covers any possible claims resulting from employee conduct at the event. The employer’s general liability policy may provide liquor liability coverage. Additionally, employment practices liability insurance (EPLI) may cover instances of sexual harassment or other inappropriate conduct by employees at the party. Depending upon the coverages in place, and any policy exclusions or limitations, it may also be prudent for the employer to take out a policy specific to the holiday party.
The above recommendations are designed to alert the employer to potential issues and best practices for avoiding liabilities in connection with holiday parties. Some topics, such as liquor liability and workers’ compensation, can vary from state to state, so be mindful of any unique requirements in your jurisdiction.