Holiday parties offer employees an opportunity to celebrate with co-workers and provide employers an opportunity to show appreciation for a year of hard work. They can also offer many opportunities for employers to be named as defendants in lawsuits.

Consider the scenario where an employee falls and injures himself at the holiday party. Whether or not the injury is compensable under workers’ compensation statutes depends on a number of factors, such as where the party was held and whether attendance was mandatory.

Holiday parties are notorious for spawning sexual harassment lawsuits, so think twice before hanging the mistletoe. A supervisor is still a supervisor and in a position of power, even at a holiday party. Further, unwelcome conduct at a holiday party is not analyzed under a different standard simply because the conduct occurred outside work hours or off the employer’s premises.

Liability does not necessarily end when the party ends. Alcohol is a significant contributing factor in conduct resulting in employee injuries and sexual harassment claims, but it is also a cause for concern when employees leave the party. An employee who causes an automobile accident on the way home from the holiday party may also result in liability for the employer.

Fortunately, there are a few things an employer can do to limit its potential liability:

Hold holiday parties away from the employer’s place of business;

Use third-party vendors to serve alcohol;

Stress that attendance at the party is voluntary, and make sure no subtle suggestions are made that attendance would be beneficial to an employee’s career or continued employment. Additionally, make sure employees are aware that time spent attending a holiday party will not be considered hours worked;

Don’t hand out bonuses or service awards at the holiday party because doing so increases the perception the party is a work function rather than a social event;

Invite employees’ spouses or guests. Not surprisingly, the presence of these guests is likely to limit cases of sexual harassment and will help monitor employees’ consumption of alcohol;

If serving alcohol, serve food;

Stop serving alcohol a couple of hours before the party ends;

Make alternative transportation available or provide hotel rooms to employees who have consumed too much alcohol. Even a simple offer to pay for taxis can limit an employer’s liability;

Ensure the venue for the party is accessible for individuals with disabilities;

If the party is being held at a private club, make sure it is not one with restricted memberships that may give rise to a discrimination claim; and

If an incident does occur at a holiday party, such as an employee injury or a report of sexual harassment, follow your policies and procedures related to investigations.

Holiday parties are supposed to be fun, and they still can be while also limiting the potential for liability.