It is important not to require employee attendance at holiday parties and that pressure to attend is properly managed. Mandatory attendance at company-sponsored functions, like holiday parties, can result in workers' compensation claims if an attending employee is injured. It can also mean that the employee is entitled to be compensated for his or her time spent at the event pursuant to the Fair Labor Standards Act ("FLSA").
For workers' compensation liability, if the employee is required to attend a company-sponsored event, or there is significant business that takes place at the event that essentially makes attendance mandatory, then the employee will be considered to have been acting in the course of his or her employment and the same rules that apply to typical workers' compensation claims apply to injuries the employee suffers while at the holiday party.
The timing of the event is important for determining if and when workers' compensation laws may come into play. For example, if the event is held during normal working hours, then employee’s attendance will likely be considered as “in the course and scope of their employment” though courts will also typically look at:
- The extent to which the employer expects/ requires employees to attend;
- The extent to which the employer benefits from the event, e.g., will clients be present and/or will work be done;
- The degree of participation by the employer;
- Whether the activity takes place on the employer's premises or off-site; and
- When the event takes place in relation to the employee's normal work hours.
Several courts have recognized that an employee's voluntary attendance at a social event sponsored by his employer off the employer's premises and outside normal working hours cannot reasonably be viewed as conduct within the scope of his employment.
To help make your company holiday event festive while reducing your liability, keep the following tips in mind:
- Make Attendance Optional: Make it clear to employees that attendance at a company-sponsored events is purely optional, not mandatory. This also means keep the event social, not work related. Keep work-related events, like handing out of bonuses or awards, for another day.
- Pony Up the Pay: If attendance is required or the event is during work-time, compensate your employees, including overtime pay if their hours for the week exceed 40.