Over the past two years, employers dealing with the COVID-19 pandemic were forced to hold their holiday celebrations virtually via Zoom, or maybe even scrapped such events altogether given the circumstances. This year, however, holiday office parties are back, as many employees have migrated back to the office. Indeed, employers are eager to reinvigorate and reward their employees with what will perhaps be their first “in-person” celebration in a long time. Many employees may even be meeting each other in person for the first time. While we all are ready for things to be back to “normal,” both employers and employees should not expect their holiday parties to be the same as they were “pre-pandemic.” While cases may be down this year, employers should continue to take added precautions and follow local, state, and CDC guidelines when planning any kind of event this holiday season. Regardless of the time and location of the event, company parties may be considered within the scope of employment and, therefore, subjecting employers to liability. Here are some important employment law considerations your company can use to plan a safe and successful holiday party this year.

Safety

The old adage “safety first” is more relevant these days than ever before, and safety should be at the top of every employer’s list when planning any kind of get-together this year. If the party is held off-premises, employers should perform a reasonable inspection of the property before the event to ensure no harmful or dangerous conditions exist. Employers may be liable for dangerous conditions that cause injury to attendees even if attendance is optional.

Consider hosting your holiday event at an outdoor venue, or at least partially outdoors, to encourage social distancing and to limit exposure. Of course, this may not be feasible in the winter time, so consider an event space with plenty of room for your employees to comfortably socialize without feeling cramped and on top of each other. Provide hand sanitizing stations throughout the venue and ask attendees to sanitize hands upon arrival. Hiring someone to sanitize tables and clean over the course of the event can offer an extra layer of precaution.

Employers with a large number of employees may consider limiting attendance to employees only. For companies with distinct departments, consider hosting separate holiday parties for each department, or a party alternative such as a holiday luncheon or dinner for each department. This can be a safer, COVID-conscious option while providing a more intimate setting for a team to get to know one another.

Alcohol

Employers should be aware of the potential risks that come along with serving alcohol at their holiday event. Alcohol can lead to inappropriate fraternization, sexual advances and offensive conversation that could give rise to a discrimination or harassment claim. Take complaints and reports of inappropriate behavior seriously, and promptly investigate such claims and take remedial action if necessary.

Consider removing hard liquor from the menu or provide drink tickets to each employee to limit the number of drinks each employee can consume. Providing a cash bar rather than an open bar can also be an option. Should you decide to provide alcohol at your event, be sure to also provide non-alcoholic beverages in consideration of those with certain religious beliefs or medical conditions.

Employers should also be aware of a recent development that arose from the COVID-19 Pandemic: “to-go” alcoholic beverages. Over the past two years, more than 30 states temporarily modified their laws to allow the sale of “to-go” alcoholic beverages, with many of those laws now permanently in effect. To ensure employees make it home safely, consider hosting the event at a venue that does not allow “to-go” alcoholic drinks. Instruct caterers and bartenders not to serve an excessive amount of alcohol to any one individual. Many states have laws that impose a duty upon hosts to ensure that guests are not over-served. Consider arranging for taxi services and encourage the use of Uber or Lyft so that employees who do drink in excess will get home safely.

As always, ask supervisors, managers, and all employees to maintain professionalism during the event by avoiding excessive alcohol consumption.

Marijuana

With recreational marijuana use now legal in many states, employers should be aware of the potential liability that could result from the use of such at a holiday party. Notify your employees that the use or provision of marijuana is prohibited – even if they step outside for a quick “smoke break.” Remind employees that drug and alcohol use in the workplace is addressed in the employee handbook, and such policies are to be followed at the holiday party. Employers would be keen to take this time to update their policies concerning recreational marijuana use in accordance with the laws of their state if they have not done so already.

Inclusivity

When planning a holiday event, employers must remember employees come from different backgrounds and beliefs. Therefore, it is best practice to:

• Avoid religious themed events and decorations in order to respect all those who attend. The use of winter decorations such as trees, snow, candy canes, and holly tend to be inclusive for all.
• Be mindful of faith- or culture-based dietary restrictions, and be sure to provide an acceptable option where appropriate.
• Provide accommodations and ensure the event’s location and activities are accessible for employees with disabilities.
• Communicate to employees a clear attendance policy for the event. If attendance is mandatory, employees must be paid for their time spent at the event. Therefore, it is best to make attendance at the holiday event optional, and remind those in managerial or supervisory roles to not take adverse action against employees who decide to sit this one out.
• In the event attendance at the holiday party is voluntary, employers should advertise it as such in any e-mail or invitation to avoid potential liability under the Fair Labor Standards Act (“FLSA”) or applicable state or local wage and hour law.

During this season, it is important to be on alert for any requests from employees for accommodations for their sincerely-held religious beliefs.  Employers are legally obligated to accommodate their employees’ sincerely-held religious beliefs unless such an accommodation would impose an undue burden upon the employer. Importantly, employers are generally obligated to provide a religious accommodation only if the employee makes the employer aware of the need for such an accommodation and informs the employer that the accommodation is being requested due to a conflict between religion and work.  Employers should take employee requests for religious accommodations seriously and should consider such requests on a case-by-case basis. In addition, employers should consider using the holiday season as an opportunity to review their current religious accommodation policies or develop new policies for handling religious accommodation requests moving forward.

Awards, Bonuses and Gifts

While it may be the season of giving, be careful what you gift! If you send out holiday cards to employees, customers, and clients, steer clear of religious themes and ensure the cards and messages are appropriate for all backgrounds and beliefs.

Additionally, with regard to bonuses, employers should confirm compliance with state and federal wage laws and keep in mind these basic guidelines that apply to non-exempt employees only:

• If nondiscretionary bonuses, gifts, prizes, awards and/or incentive payments are based on the quality, quantity, or efficiency of production or hours worked, then the value of such payments must be calculated into the employee’s average hourly rate for the purpose of overtime pay. This means that any overtime worked in the pay period during which the bonus was received must be recalculated to adjust for the value of the nondiscretionary bonuses, gifts, prizes, awards or incentive pay.
• If the prize is merchandise, the amount to be allocated is the actual cost to the employer.
• Employers may only exclude a bonus from the regular hourly rate if the bonus was discretionary. A bonus is truly discretionary if the allocation and amount of the bonus are left to the employer’s sole discretion and the payment was not made pursuant to any prior contract, agreement, or promise that would lead the employee to expect the payment.

Remember, if an employer gives an employee anything of value, it is included in the employee’s taxable income, but there usually are exceptions for “de minimis fringe benefits” – i.e. non-cash gifts. Be sure to avoid any gifts that may also create a conflict of interest. Employers should take time this season to review their gifting and conflict of interest policies to ensure they are up to date and in compliance with the law.

Independent Contractors

Companies that utilize independent contractors and temporary employees should take proactive measures to avoid creating evidence that an employer-employee relationship exists.

• For example, employers may not want to give independent contractors the same gifts they give employees because the DOL, IRS, or other agencies might use this evidence against an employer.
• Employers may choose to prohibit temporary employees and independent contractors from attending holiday functions.
• In the case of temporary workers from a staffing agency, if such exclusion is too harsh, the company may negotiate with the independent staffing agency that provided the temporary workers to have the staffing agency provide some benefit or involvement in the function to solidify the staffing agency’s role as the true employer. For example, the staffing agency may be required to pay a small fee to subsidize the temporary workers’ attendance, send invitations through the agency, or have an agency representative on-site at the event.

Charitable Activities: For Volunteers Only

The holidays are known for not only giving gifts, but also giving time. Employers and employees alike may be interested in volunteering in philanthropic pursuits. The FLSA permits employees to donate their time for humanitarian, religious, charitable, or other public-service reasons. However, such services must be conducted on a voluntary basis without the contemplation of pay.  Employees may not volunteer services to for-profit private sector employers.  Additionally, non-profit employers should be cautious if employees volunteer their time for the employer so as to not run afoul of wage and hour law.

Public sector employees may not volunteer services to another public sector employer without additional compensation where the employee is performing the same work for which he or she is employed. Similarly, the Department of Labor mandates compensation to public sector employees who provide services for a charity at the employer’s request, under the employer’s direction or control, or during the employee’s regular work hours.

If you have any questions regarding the issues raised in this client alert, please contact your Labor and Employment counsel at Smith, Gambrell & Russell, LLP.