The Legal Side of Holiday Parties: How to Celebrate Safely with Your Team

While the holiday spirit encourages connection, it’s important to remember that employers can still be held responsible for employee conduct at company-sponsored events—even if attendance is optional or off the clock. That includes potential claims related to harassment, discrimination, injuries, or accidents following the event.

None of this means you should cancel your celebration. It just means you should plan it the same way you would any other business activity—with clear expectations, safety in mind, and a little legal foresight.

Where Legal Risks Can Sneak In

1. Alcohol and Accountability

If alcohol is served, your business could face liability if an employee drinks too much and causes harm—to themselves or others—during or after the event. To reduce risk:

• Limit alcohol service or use drink tickets instead of open bars.
• Hire licensed bartenders trained to check IDs and monitor consumption.
• Always offer food and non-alcoholic drinks, and consider ending alcohol service before the party wraps up.

Even if the event is held off-site, courts have sometimes found employers liable for post-party incidents, especially when attendance was encouraged or expected.

2. Conduct and Harassment Claims

Holiday parties can loosen boundaries—and that can lead to behavior that wouldn’t fly at work. If employees feel uncomfortable or harassed, it can still be considered a workplace issue under anti-discrimination laws. A short reminder about your company’s conduct policy before the event can set the right tone. Managers, in particular, should model appropriate behavior and know how to respond if issues arise.

3. Attendance, Pay, and Injury Risks

If the event is during work hours, attendance may count as paid time under wage laws. If it’s after hours but mandatory, the same rule could apply.

Also, injuries at employer-sponsored events—even something as simple as a slip and fall—can sometimes trigger workers’ compensation claims, depending on state law. That’s another reason to verify your coverage and confirm whether your business insurance extends to off-site functions.

Questions SMBs Should Be Asking Before A Holiday Party

Before locking in the venue or menu, pause to think through these key questions:

• Do I need a policy for off-duty events? Should I clarify expectations around alcohol, conduct, and attendance in writing?
• Am I handling alcohol responsibly? Will I hire professional bartenders or limit serving hours?
• What’s my liability if something happens? Does my insurance cover off-site or after-hours company events?
• Should I make attendance optional? How can I encourage participation without creating pressure or wage complications?

What to Do Next

A little prep goes a long way toward keeping your celebration fun and compliant:

1. Review your employee handbook or conduct policy and update it to include company-sponsored events.
2. Confirm liability and workers’ compensation coverage with your insurance provider.
3. Communicate expectations clearly in your party invitation—keep it friendly but firm.
4. Ask Rocket Copilot or a Legal Pro to review your workplace policies and confirm you’re protected for off-duty gatherings.

You can absolutely host a joyful, memorable holiday party—just pair the celebration with a few smart safeguards. When you plan ahead, you protect both your people and your peace of mind.