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How To Limit Liability At Your Company Party

Last Updated on December 12, 2022 / Legal Compliance

HR Question:

We’re looking forward to hosting our company holiday party to celebrate our accomplishments this year. While we want this to be a fun celebration, we also want it to be responsible. How can we limit liability at the company party, especially if we’re considering serving alcohol?

HR Answer:

The holidays are here, and to many, that means it is time for holiday parties. While holiday events are a great time to bring your team together and increase engagement, there are potential employment law concerns to keep in mind as an employer. The following are things to consider to limit potential liability prior to hosting your event:

  • If it is truly a social event for your team, do not require attendance. Remind staff that attendance is not required but voluntary. This can limit liability with a potential harassment claim because the event is voluntary and not in the course and scope of employment.
  • To further support the non-work nature of the event, hold the event off-site and outside of regular business hours. You should also allow employees to bring a guest.
  • Set expectations around respectful behavior and encourage employees to drink responsibly. Remind employees that company policies, including harassment and other conduct policies, apply at the event.
  • Determine if alcohol will be offered. Company leaders will need to determine if the company holiday party is the right environment for alcohol. There are multiple factors to consider, including the age range of your workforce, how the timing of the party fits with employees’ work schedules, past history, and the location of the party. If you have employees under the age of 21, your company will need to assess how you will handle this potential liability. If you have employees attending the party before their shift, that is another issue you will need to address.

How to handle alcoholic beverages at the party

If you make the decision to provide alcoholic beverages, there are a number of considerations you should make to limit liability at your company party, including:

  • Provide food and non-alcoholic beverages at the event, both for safety reasons and so those who choose not to drink alcohol know you’ve given them consideration.
  • Offer a cash bar where employees purchase alcohol. This will reduce the likelihood of a claim that the employer provided alcohol directly to employees. It will also reduce consumption.
  • Provide employees with a set number of drink tickets so that each attendee is limited in the number of alcoholic drinks they will be served.
  • Plan for how employees who have been drinking will get home. This may involve providing taxis or public transit options at no cost to the employees, arranging for group transportation, or encouraging employees to designate a driver at the beginning of the event.
  • Even if you don’t plan to provide a taxi service, don’t think twice about calling and paying for one if an intoxicated employee has no way home other than driving themselves. To facilitate this, someone from management can be designated to stay until the end and maintain their own sobriety to ensure that everyone gets home safely.
  • Have a plan to ensure that no minors or visibly intoxicated attendees are served alcohol. If possible, hire professional servers (or hold the event at a staffed facility) who will, as part of their job, politely refuse to serve anyone whom they perceive has had enough to drink.

How to handle cannabis at the event

Consider the potential use of cannabis at the party. With the legalization of cannabis in many states, employers also need to be prepared to deal with this new potential concern at holiday events. Employees may believe it is appropriate to bring this state-legal drug (in some instances) to the party, but, marijuana remains illegal under federal law.

It may be appropriate to remind staff of your drug-free workplace policy (if applicable) which prohibits consumption in the workplace and at company-sponsored events. If you wish to avoid consumption at your party, clearly communicate the policy to employees ahead of the event. The Society for Human Resource Management (SHRM) offers these additional suggestions regarding cannabis at holiday parties.

While these steps will not eliminate all the risks, they can help reduce liability and help your employees celebrate the year and their achievements safely and responsibly. For more suggestions on how to limit liability at your company party, SHRM provides these tips to reduce liability while celebrating the season.

Thank you to Patti Dunham, MBA, MA, SPHR, SHRM-SCP, Director of HR Solutions, and our HR Support Center for contributing to this HR Question of the Week.

It’s important to celebrate company success, but don’t throw caution to the wind in the process. Our Strategic HR Business Advisors are prepared to help you celebrate and protect your business and your employees. We can help you to reduce your potential liability by fielding your questions and offering resources to help you identify and mitigate compliance issues. Visit our Legal Compliance and Recordkeeping page to learn more about how we can help or contact us for immediate support.