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Traditional holiday parties can be a major liability risk for any employer, whether they are company-sponsored or impromptu gatherings of employees.

Employers who serve alcohol at company-sponsored events may be liable, if an employee chooses to drive under the influence and causes an accident, according to the U.S. Department of Labor. Some companies have been held liable for fatal accidents when the courts ruled that employees attended the parties within the scope of their employment.

When parties are held on work premises, or during work hours, an employee who is injured may be eligible for workers’ compensation. This is true whether the party is officially sanctioned or a spontaneous gathering of coworkers.

In one extreme example, a Chicago-area boutique employee suffered a spinal injury at a holiday party in a local bar. The employee was dancing with her boss’ husband when the inebriated man tried to lift her off the floor and twirl her around. He dropped the employee, who hit her head on the floor. Because the accident occurred at a company-sponsored event, the court ruled that it was “within the scope of employment” and the worker collected a multi-million-dollar workers’ comp settlement.

 According to the National Highway Traffic Safety Administration or NHTSA, each year employers pay more than $9 billion for accidents by employees who are under the influence of alcohol. Liquor liability laws vary a great deal, and employers should check the laws in their state.

Many employers are cutting back on holiday parties this year as a cost-saving measure. The U.S. Department of Labor has a series of guidelines that employers can implement, to limit liability and encourage responsible behavior at employer-sponsored or impromptu holiday parties.

The U.S. Department of Labor offers nine tips for office celebrations to reduce the risk for employers. These guidelines include extending the workplace substance abuse policy to include any work-related situations or employer-sponsored parties, including office functions.

Employers should also remind managers that they are on duty, and must supervise employees’ actions, even during parties. Many companies have switched to events at local venues that do not serve alcohol, such as amusement parks or a volunteer activity with a local charity.

If alcohol is served, make sure plenty of non-alcoholic beverages are also available. Encourage responsible drinking and have designated drivers on hand.

. This information provided by the U.S. Department of Labor is not intended to be a substitute for legal advice and should not be relied upon to determine what steps employers can or should take to address potential legal liability.

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