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The Not-So-Fun Side of Holiday Parties Limiting Alcohol and Paying for Attendance

Posted Tuesday, December 10, 2019 6:25 am

Over two-thirds of participating organizations (71.7%) reported that they will have an organization-wide holiday party this year according to HEC’s 2019 Holiday Practices Survey.  Company holiday parties can boost employee morale and build camaraderie, but there are many issues that should be considered when party planning.  Companies must not overlook the liabilities that can come with hosting such an event, such as religious discrimination, wage and hour implications, sexual and other harassment, and other problems that may arise when alcohol is involved.  As you put the final touches on your holiday party planning, please consider the following.

Alcohol

According to HEC’s survey, of the organizations that will host a holiday party, 51.3% will not have alcoholic beverages available.  If alcoholic beverages are served at the party, consider the following top five reported precautionary measures organizations will take:

  1. Limit the number of complimentary drinks (through drink tickets or set maximum allowed drinks)
  2. Limit the time frame for serving alcohol
  3. Cocktail servers will be instructed to monitor drinking and refuse service to intoxicated employees and/or guests
  4. Offer alternate transportation services (e.g. Taxi, Uber, Lyft, Ride-Sharing)
  5. Limit the type of drinks available (i.e. beer and wine)

Additionally, 48% of respondents to HEC’s survey allow employees to bring a spouse or guest, which may help employees stay on their best behavior.  Other tips include providing food and entertainment so alcohol is not the focus of the party, and reminding managers they are responsible for setting the example of appropriate behavior at the party and to keep an eye out for employees who may be drinking in excess or behaving inappropriately.

Do we have to pay employees who attend the company holiday party?

Under the Fair Labor Standards Act (“FLSA”), you have to pay nonexempt employees for attendance at a company holiday party if the party is during regular working hours.  According to HEC’s survey, almost half of respondents will host the event outside of regular working hours.  Even if the party is not during regular working hours, however, you may still have to pay nonexempt employees for attendance if you require them to attend the party.  Of course, just saying attendance is voluntary is not enough if employees are “strongly encouraged” to attend through the implication that they would otherwise face negative consequences.  Along those lines, even if attendance at the event is otherwise completely voluntary, nonexempt employees who are asked to help plan or work during the holiday party may need to be paid.

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