Question: My company is planning a holiday party for our employees. Are there any legal considerations we should be aware of when planning the company holiday party?
Answer: Yes. As the holiday season approaches, companies planning holiday parties should consider various factors to ensure the gatherings are legally compliant.
Voluntary attendance: Making attendance at any end-of-year celebrations respects individual preferences and helps avoid potential legal issues related to wage-and-hour regulations. For example, making attendance mandatory would be considered hours worked since the employee is subject to the control of the employer and the employee would need to be compensated for that time. Additionally, some employees may have reservations about attending events associated with specific holidays or where alcohol is served. Mandatory attendance not only goes against these preferences but can also expose employers to additional liabilities for any injuries that may occur during the event. Employers should also make gift exchanges voluntary.
Responsible alcohol consumption: Opting to serve alcohol at your holiday party is a common choice, even for companies with a Drug and Alcohol Free Workplace policy. However, maintaining a balance and ensuring responsible consumption is important for the safety of all attendees. Employers have a responsibility to provide a safe environment, and in certain circumstances employers may be held liable for the actions of their employees even after they leave the holiday party, such as with alcohol-involved auto accidents. To mitigate risks, employers can consider measures such as distributing drink tickets, setting a cut-off time for alcohol service, and making food and water readily available to lessen the impact of alcohol. Employers may also consider covering the costs of transportation home, such as through a ride-share account.
Respectful conduct: Despite the more relaxed atmosphere of a holiday party, it is important to remember that all company policies, including anti-harassment and code of conduct guidelines, remain in effect. Attendees should adhere to these policies, and decorations and gifts should avoid anything offensive or sexually suggestive. Employers play a vital role in setting the tone by reminding employees of these policies before the event and reiterating them during any gift exchange announcements. In the event of a complaint of harassment or violation of the code of conduct, prompt and thorough investigation followed by appropriate remedial action is necessary.
Inclusive theme: To foster inclusivity and prevent anyone from feeling excluded or discriminated against, employers should avoid centering the party theme around a specific holiday or religion. Instead, a neutral theme would be advisable to create a welcoming atmosphere for all employees.
End-of-year discretionary bonuses: Employers who choose to give end-of-year discretionary bonuses should consider the legal implications of bonuses. Holiday bonuses, which are based on no objective criteria and are not routine, are a common type of discretionary bonuses. Employers should be careful to distinguish these discretionary bonuses from non-discretionary bonuses, in which employers promise to pay a bonus in return for a specific result, such as exceeding a minimum sales figure. Non-discretionary bonuses must be included in the regular rate of pay for the purpose of overtime calculations for nonexempt employees. Because of the legal implications, employers should be mindful in distinguishing that the end-of-year bonus or gift is discretionary.
Marco Lucido is a lawyer with Fenton & Keller in Monterey. This column is intended to answer questions of general interest and should not be construed as legal advice. Email queries to mlucido@fentonkeller.com
