The Legal Pitfalls of a Holiday Party

November 25, 2014

The holiday season is quickly approaching and many organizations are planning their office celebrations. There are an increasing number of legal issues that employers need to be sensitive to when planning these events.

Planning the Party 

To avoid religious discrimination claims it is a good idea to diversify the nature of the party – and therefore best to include different religious symbols and decorations – such as a Christmas Tree, a Chanukah Menorah, and a Mkeka for Kwanzaa.  If an employee objects on religious grounds to participating in mandatory holiday customs, he/she would have to be accommodated. Also, by inviting family members to come, it will help control the behavior of your employees.

If you plan to invite significant others, it is best to include “spouses or partners” in your invitations. We also recommend you gently “manage” the event; that is, have a few managers entrusted with watching employees so that they behave appropriately. If you do so, request employees RSVP for the party to help staff it appropriately.

Making Attendance Discretionary 

You are best to make attendance optional, or else you would have to pay non-exempt employees for their time. Not only will they be entitled to regular pay for those hours, the length of the holiday party may push an employee over 40 hours worked in that particular week, which makes him/her eligible for overtime pay.

Also, mandatory attendance increases employer’s risk of liability for employee injuries. In most cases, employers are liable for employee injuries that occur during the course and within the scope of employment. If attendance is required, it would be difficult for an employer to claim that an injury did not take place within the scope of employment. 

Serving Alcohol 

It is best not to use an employee to serve drinks; arrange for a professional bartender or caterer. The bartender or caterer need to monitor alcohol intake and politely not serve those who they perceive have had too much to drink. If you hire a caterer, you should ensure the caterer carries liability insurance.

Here are some easy tips we recommend with regard to serving alcohol:

  • Make sure no minors are served alcohol.
  • Have a plan to arrange cab service for any intoxicated employees.
  • Avoid “dance-offs” or other contests where employees may exert themselves and suffer some type of injury.
  • Some employers avoid wine and beer altogether when children are invited.
  • Avoid serving an alcoholic-based drink, such as punch, that employees can serve themselves.
  • Serve plenty of food to help counteract the alcohol and serve non-alcoholic drinks, especially water.
  • Employers can use drink tickets to control the dispensing of liquor.
  • Consider a daytime or weeknight event to dissuade over-consumption. 

Avoiding Harassment Claims 

We receive calls often after the holiday party about the behavior of employees who engaged in inappropriate touching or remarks, after ingesting liquor.  It is important to remind staff that sexual harassment rules apply at holiday parties just as they do in an office setting.

Also, avoid risky traditions that can lead to inappropriate behavior such as hanging mistletoe or having employees sit on Santa’s lap.


If you are going to hire entertainment for the party, be selective. Hiring a DJ who will only play Christmas music or enlisting a comedian who may target employees in his/her act can offend employees and lead to a possible discrimination claim. Offer professional entertainment that offers the least possibility of controversy. 


Since the event is considered “employer-sponsored” you may wish to check with your insurance broker to see if an endorsement to your Workers’ Compensation policy covers an injury at this type of event.

Enjoy the Party

Putting together a safe, clean and fun holiday party may seem difficult, but with careful planning and being mindful of the legal pitfalls, you can offer your employees a night to celebrate and build camaraderie.

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