Company Events and Liability: What HR Needs to Know
Warm weather is upon us and now is the time many organizations take their employee appreciation efforts on the road! Company events outside of work bring many benefits to the workplace. They are opportunities to build relationships in a more casual environment as well as make employees feel valued and appreciated. Certain company events present more potential risks to companies, such as if alcohol is served or if significant physical activity is exerted during the event. Let’s address some issues that might arise with respect to employer obligations and potential liability for an employee’s physical injury taking place during a company-sponsored event.
Is the accident compensable under workers’ compensation?
Workers’ compensation coverage is determined at the state level. Employers should partner with their workers’ compensation carrier to ensure claims are appropriately and timely filed. The carrier makes the ultimate decision about coverage, but they need to have accurate information to do so. This means there needs to be a clear understanding of the nature of the event. Is it primarily recreational, or is there also a financial update from the CFO being presented? Regardless, your everyday safety measures should be followed, such as a strong internal injury reporting procedure. What happens if there is an injury? Who is notified? Who is responsible for documenting and following up? If the event requires physical activity, all of the above needs to be decided and communicated ahead of the event.
Is the incident work-related such that it is required to be recorded on the company’s OSHA log (if applicable)?
Determining whether an injury that took place during a company event is “work-related” and reportable pursuant to OSHA largely depends on whether the activity being participated in is completely voluntary. The federal OSHA recordkeeping standard for determining “work-relatedness” states:
1904.5(b)(2) Are there situations where an injury or illness occurs in the work environment and is not considered work-related? Yes, an injury or illness occurring in the work environment that falls under one of the following exceptions is not work-related and therefore is not recordable.
1904.5(b)(2) You are not required to record injuries and illnesses if…
(iii) The injury or illness results solely from voluntary participation in a wellness program or in a medical, fitness, or recreational activity such as blood donation, physical examination, flu shot, exercise class, racquetball, or baseball.
To the extent an injury is not covered by workers’ compensation, is the employer potentially liable for negligence or some other civil claim?
An additional consideration for employers is whether they should obtain an employee waiver and release agreement for company events with a high risk of physical injury. This step can help mitigate the risk of civil negligence relating to physical injuries. It is important to understand the difference between liability under a civil claim and workers’ compensation. If an injury is eligible for workers’ compensation coverage, those rights cannot be waived through an agreement. Waiver and release agreements should be tailored to ensure compliance with state laws. Employers should consult with their business or litigation attorney to craft an agreement that meets their specific needs.
What other steps can an employer take to mitigate risks at company events?
The more a company can do to separate itself from the activity, the better it can reduce its liability for accidents. For example, activities should be held away from the company premises, preferably outside normal business hours, with no attendance record kept and no pressure to participate.
Reach out to an HR Advisor with questions about these guidelines or specific concerns!
Frequently Asked Questions
Is an employer liable for employee actions at a company party?
Yes. Courts regularly hold employers liable for incidents occurring at company-sponsored events, especially when alcohol is served. “Course and scope of employment” can extend to after-hours events if attendance is expected, the employer paid for the event, or the event serves a business purpose. Liability extends to drunk driving accidents, harassment, and assaults.
What steps can HR take to reduce liability at company events?
Key risk mitigation steps include: making attendance voluntary and not penalizing absences, hiring a licensed bartender (not self-service) with a per-person drink limit, ending alcohol service before the event ends, arranging transportation (Uber credits, designated driver program), conducting harassment prevention reminders before the event, and having a sober HR contact present.
Can employees be disciplined for behavior at company social events?
Yes. Employees can be disciplined or terminated for misconduct at company events just as they can be in the workplace. Company events are an extension of the workplace environment. The harassment policy, code of conduct, and anti-discrimination policies all apply. Document incidents the same way you would any workplace investigation.
Does workers’ compensation cover injuries at company events?
It depends on whether attendance was mandatory or strongly encouraged. If an employer required attendance or made the event a condition of employment, injuries may be covered under workers’ comp. Voluntary social events with no work obligation are generally outside workers’ comp coverage, but this varies by state.
Are there special considerations for holiday parties in a diverse workplace?
Yes. Frame events as “company celebrations” rather than specifically holiday-themed to be inclusive of all employees. Provide non-alcoholic beverage options. Be mindful of dietary restrictions at catered events. Ensure activities are accessible to employees with disabilities. These steps reduce both legal risk and morale issues.
