November 23, 2018 HR Laws and Regulation en_US Holiday parties are great fun, but a ripe for legal problems. Implement some policies beforehand, and set up some boundaries during the party, and you will protect your company and your employees. How to Legally Throw a Holiday Party
HR Laws and Regulation

How to Legally Throw a Holiday Party

By Eric Carter November 23, 2018

Holiday Parties are a great way to reward your employees for their work and build your company culture.

A festive time of year, good food and drink, and a fun venue will help everyone drop their guard and have fun together.

Unfortunately, a little fun can turn into a lot of trouble if you aren’t careful.

Prevention is the key to protecting your company and your employees from holiday party problems and liabilities.

Prevention is a two-step process:

  1. Before the holiday party, implement company policies that apply to holiday parties
  2. During the holiday party, use ground rules to limit bad behavior

Before the party

Company policies

Company policies should specifically address expected behavior at holiday parties and company events.

For example, any good anti-harassment policy includes examples so employees know how to identify and prevent harassment in the workplace. Use a holiday party setting in one of your examples.

A holiday party example shows employees that your policies apply during all company events, and clearly demonstrates appropriate and inappropriate behavior at a holiday party.

Your employee handbook and timekeeping policy should also address holiday parties. Make sure that these policies state that holiday party attendance is voluntary and employees will not be paid for their attendance.

If a holiday party is a company culture builder, shouldn’t you want everyone there?

Of course, you want everyone to attend, but legally you should not require attendance. Holiday party attendance should be voluntary for a couple of reasons.

First, if attendance is mandatory, you must pay the appropriate overtime to all non-exempt employees. You are paying enough to show your employees a good time. You don’t need an added expense for overtime.

Second, mandatory attendance means that employees are required to come to the party as part of their job. Any injury or damage to any employee or the property become your responsibility as the employer.

Making attendance voluntary is the first step in separating holiday party attendance from regular working hours. Use some of the following best practices to ensure your holiday party doesn’t become a regular, compensable work event:

  • Encourage employees to invite non-employee guests (such as family)
  • Avoid business-centric speeches or performance-based awards
  • Don’t invite customers, service providers, or vendors
  • Host the party outside of normal business hours
  • Avoid giving employees specific tasks to do at the party

Non-employee guests not only help protect your business from wage and hour claims, but they also help keep behavior under control.

Employees work together eight hours a day. In many cases, employees see their coworkers more than their families. Employees become very comfortable with each other over time.

When you set comfortable people loose at a party with alcohol and no work assignments, behavior easily escalates to problematic levels. Non-employee guests help keep such behavior in check.

Non-employees don’t know all of your employees, and your employees won’t know their coworkers’ dates. Unfamiliarity prompts employees to act as grown-ups meeting new people.

Think about the social tone of your holiday party. You want the social, but calm feeling between two nice people meeting each other. You don’t want a bunch of overfamiliar employees turning the venue into a fraternity house to drink away the weekend.


Pick an offsite location to host your holiday party. An offsite location helps distance your event from regular working duties.

Events of any kind hosted at your regular place of business are often treated as normal business. It’s where your employees perform their usual duties, and they might feel compelled to attend if the event is held at your office. The same analysis applies to your holiday party.

Additionally, offsite locations provide you with some protection against alcohol-related and employee behavior-related liabilities.

Offsite locations often include professional bartenders and event managers to oversee the serving of alcohol and the overall event.

Such professionals are trained to make the call when to stop serving guests alcohol and when to intervene with employee behavior that gets out of control.

If non-employee event staff is responsible for preventing or stopping dangerous behavior, you won’t be the buzzkill that ruined the holiday party.

In many states, people who serve alcohol to inebriated individuals are at least partially responsible for alcohol-related incidents. If a professional bartender controls alcohol service, you avoid being responsible for an employee who drinks too much and causes harm.

During the party

Control alcohol

If your business is like most, your employees will expect alcohol at your holiday party. And, you will meet that expectation.

Alcohol is part of the appeal to a holiday party. But, alcohol is commonly the root cause of holiday party problems.

In addition to serving alcohol through third-party professionals, set guidelines for your professional bartenders.

Avoid completely open bars. Consider a ticket system. Each employee gets two tickets for an RSVP to the holiday party. After the employee uses the two tickets, additional alcoholic drinks are available at a charge.

You don’t have to follow the exact ticket system above to limit alcohol consumption. The goal is to create a roadblock to unlimited, free alcohol consumption. Here are some alternatives:

  • Beer and wine are free. Liquor drinks available at a charge
  • Non-alcoholic beverages are available at self-serve stations, but alcohol is controlled by a single bartender
  • Tickets for alcohol must be won through event contests and games

Any barrier to alcohol will lower consumption. Whether the barrier is monetary, long lines, or a silly game; have a plan to limit binge drinking.

Avoid legally risky traditions

Avoid traditions that invite problems.

The name of the party is the most obvious example.

I’ve used Holiday Party in this article, and you should likely do the same.

The term Holiday avoids discrimination against any particular religious or social group. This isn’t an ironclad rule. You know your workforce, and they might not take offense at Christmas Party. In fact, using the term Holiday Party may get you accused of “warring” against Christmas.

Wherever your business lands on the party name spectrum, blame the law if your employees push back on your party name. The law is clear on avoiding discrimination based on religion in all company activities. You can’t risk violating the law.

Traditions more likely to cause problems are those that create the potential for sexual harassment.

For instance, you may have an employee dress up as Santa Claus for your party. If you do this, don’t offer the opportunity for employees to sit on Santa’s lap for a picture. This invites touching, and employees touching each other is an opportunity for sexual harassment claims.

Likewise, don’t hang any mistletoe that prompts kisses. If you are throwing a Valentine’s party, don’t provide a kissing booth.

Sexual harassment is determined by the employee who feels harassed, not by the intention of the accused harasser.

What does that mean?

Let’s use an example to explain.

Imagine you let 100 employees sit on Santa’s lap for a picture. Assume Santa treats all 100 exactly the same, with no inappropriate intentions. If one of the 100 feels harassed by Santa, you will face at least one sexual harassment investigation, and potentially a sexual harassment lawsuit. Santa’s intent is irrelevant.

If a holiday tradition creates the potential for discrimination or harassment, avoid the tradition.

Facilitate team building traditions

Substitute team building traditions for the riskier traditions listed above.

Instead of a party with alcohol and music, consider a group activity that serves the community. Here are some examples:

  • Throw a holiday party for an underserved school and their parents
  • Volunteer at a soup kitchen or local charity
  • Set up an employee-donated toy store for low-income families to shop for free
  • Host a community-wide cooking contest.

Service-oriented party alternatives help bind your employees through a common goal and avoid some of the risks associated with traditional holiday parties.

If you want to host a more traditional party, promote skill-based traditions:

  • Escape room
  • Carnival games
  • Poker tables
  • Races

Your employees are competitive and will want to win such events. When employees need their faculties to win, they will naturally avoid consuming too much alcohol or participate in more risky behavior.

There are plenty of fun activities that employees find celebratory and avoid the typical holiday party problems.

Prepare for the worst case scenario

If you serve alcohol, assume at least one employee will drink too much.

Make driving services available, and make sure employees know how to use the services.

Provide the transportation for free or at a discounted rate so employees are more likely to use the services:

  • Prepay a shuttle service
  • Create a corporate account with Uber or Lyft
  • Provide event planners with taxi vouchers

Make sure the event planners know how to direct employees to transportation services. Not only do you want to protect your company from a legal perspective, but you also want to help prevent anyone from getting hurt.

Beyond transportation, consider booking a hotel event room for your holiday party. If you use hotel space for the event, the hotel will likely offer your employees a discount on a block of rooms.

Offer this discount to employees before the event. Additionally, reserve a few rooms for employees who drink too much.

Preventative measures are critical to throwing a legally sound holiday party. Include holiday parties in your company policies. Create a party environment that limits poor decisions and is ready to respond to problems.

Eric Carter

Eric is the founder of Dartsand and Corporate Counsel for a global technology solutions provider. He is a frequent contributor to technology media outlets and also serves as primary legal counsel for multiple startups in the Real Estate Development, Virtual Assistant and Mobile App industries. Read more