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Compensating Employees for the Company Holiday Party

Last Updated on August 16, 2023 / HR Compliance


Our company is having a company holiday party, so do we need to pay our employees to attend?


It’s that time of year when companies are planning holiday parties as a way to build morale and celebrate the past year with their employees.  In regards to compensation for attending the company holiday party, the obligation to pay employees for attendance at a holiday party applies only to nonexempt employees.  Exempt employees do not need to be paid extra for time spent attending.  The big thing to consider is whether or not attendance is required.  If attendance at the event is strictly voluntary, and you clearly explain this up front with all employees (including non-exempt) then you are not required to pay employees to attend.  Holiday parties scheduled during the regular work day will always be compensated.  Conversely, no compensation is owed for holiday-party attendance that is 100% voluntary and strictly for the benefit of employees.

One other point to remember is that while attendance at a holiday party may be 100% voluntary for most employees, those who are working the event — even if the work is voluntary — must be paid.

In conclusion, when planning your holiday party, remember the following:

  • Make attendance at the holiday party entirely voluntary and clearly convey that message to employees.
  • Consider scheduling the party during regular working hours when nonexempt employees are paid anyway.
  • To the extent attendance is required, publish the hours of the party and enforce them.
  • Neither ask nor permit nonexempt employees to prepare for and/or work at the party outside regular work hours.
  • Remember there are various legal considerations. For example, serving alcohol, especially if provided without limitation, can lead to employee DUIs and tort claims, as well as reduced inhibitions that might lead to harassment claims.


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