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Is liability a concern at a company holiday party?

From a liability perspective, a company party is more than just an average get-together or meeting. If the employer sponsors the event, there is a good chance that the employer may be responsible if an accident happens. Requiring a waiver or release is one of the best ways for employers to protect themselves during their holiday season events and activities.

A Release of Liability is a legal document that asks someone to waive or release their right to hold another person or business responsible if anything happens at an event or activity. The document, which can be called a waiver or a release, provides an employer some legal protection if an accident occurs during or after a party.

You can make signing the waiver a condition of attending the party. Employers may get some hesitancy from employees, or employees who forget to sign before the event. Fortunately, having a guest electronically sign their Activity Release from their mobile device is easy. A good strategy is to include the waiver as part of your RSVP process. This can help you track who has responded while also laying the groundwork to inform your team that you are conditioning attendance based on the waiver.

Does workers' compensation cover company events?

You may be surprised to learn that workers' compensation insurance might apply to injuries sustained during holiday parties if the situation meets specific requirements.

Workers' compensation laws vary by state, but if the holiday party meets the following criteria, it is more likely to be covered by workers' compensation:

  • Employer-required or -expected attendance.
  • Held at employees' regular workplace.
  • Held during normal work hours.
  • Hosted by the employer directly as opposed to a third-party host.

Workers' comp is unlikely to cover accidents that happen during travel to and from the work party. To make sure you have insurance coverage in case of an incident, you may want to discuss a limited addition to your business's general liability policy with your current insurance provider.

Are there additional precautions to take if alcohol is served at a holiday party?

Many employers opt to serve alcohol at their holiday parties. While serving alcohol is not a problem in and of itself (in most situations), it can cause some issues. For example, if an employee tries to drive home drunk and crashes or starts a fight because they were intoxicated, the employer may be held liable for the consequences of those behaviors.

Liability related to alcohol often extends to "social hosts." If an employer provides alcohol to their team, they may be considered a social host under the laws in many states. That means they might be liable for an employee's bad actions or an accident, even if the team member was not working or representing the company when it occurred.

Employers may want to take specific steps to ensure that no one is drinking excessively at the party. Limiting the "open bar" to just a few hours and serving food can be helpful. Event hosts often limit the number of alcoholic drinks served by using drink tickets. Arranging free transportation for employees and their guests can reduce the risk of anyone drinking and driving home.

What are the risks of including physical activities at a holiday party?

Physical activities, like dancing, sports, and party games, can increase the likelihood of an injury or accident at a holiday get-together. Pairing these activities with alcohol can make that risk even higher. While an injury from this sort of activity might not fall under workers' compensation, the employer may still be liable for these accidents. If an employer plans to include any potentially dangerous physical activities, it may be best to ask employees to sign an Activity Release of Liability.

What gets excluded from a waiver?

It is a good idea for an employer to talk to a lawyer about the specific items to include and exclude in a waiver. A waiver tailored to your particular needs is more likely to make it effective for your holiday celebrations. A Rocket Lawyer network attorney can help explain what may not be included in a waiver based on the laws in your area.

Waivers typically include a list of activities that may occur at your holiday party. Examples might include:

  • Dancing.
  • Alcohol consumption.
  • Scavenger hunts.
  • Physical activities like sports or party games.

Safer, common holiday party activities, like karaoke, silent auction, or trivia, may be left out of the waiver because the likelihood that someone may be injured during those activities is much smaller.

In light of the COVID-19 pandemic, employers might also want to include a clause that limits liability in case someone becomes ill after the party. However, a COVID-19 Liability Waiver might not be effective in all states, so talk to a lawyer before you rely on this type of waiver.

In some situations, if workers' compensation applies to the accident or injury, a waiver may be ineffective. Employees generally cannot waive their rights under workers' compensation laws in many states.

How long does a waiver last?

A waiver does not last indefinitely after a person signs it. Instead, it remains in effect for the limited purpose for which it was signed. If the waiver is for your holiday celebrations, it likely only applies to incidents that occur during or, perhaps, just after the party. As a result, it is often a good idea to ask employees to sign a new waiver for each event. You can usually use one release for the full event, even if the event has multiple days or venues.

Waivers are sometimes difficult to enforce, so having one waiver for a full year of multiple events is generally not a good idea. A specific waiver for each event increases the likelihood that employees fully understand what they are waiving. It is crucial that employees understand the waiver if the employer intends to enforce it in the event of an accident.

Can I make signing a Release of Liability for events part of the onboarding process for employees?

Some employers have used a blanket waiver as part of their onboarding process. However, courts are likely to determine that this type of waiver is not enforceable because it is too broad. In addition, the employee might assume that they are required to sign the waiver as a condition of employment, which can cause a court to set the document aside entirely.

Keep in mind that a waiver can almost never be used to circumvent workers' compensation requirements. That means that even if an employee signed a release, it is likely ineffective if workers' compensation would otherwise cover the employee.

In general, best practice is to use a specific waiver for each event. You might also want to reference that waivers may be requested at events in your Employee Handbook.

Ask a lawyer to review the waiver's wording so that it complies with the specific laws in your state. Taking this extra step can be very valuable in limiting your liability as an employer.

If you have more questions about liability waivers or releases, reach out to a Rocket Lawyer network attorney for affordable legal advice.

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

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