As the holidays approach, many companies are considering throwing parties — office gatherings that can be a great morale booster and even a team builder as people are encouraged to push off from the desk, grab a frosted cookie and celebrate the holidays or a successful year together.

In the past, many companies thought nothing of adding some rum to the eggnog to further enhance the camaraderie. The biggest concern was an overly enthusiastic dancing-with- the-lampshade-on-the-head employee breaking the lampshade. But times have changed, and now most of us think twice about the potential liabilities involved in allowing employees to grow merry on the spiked punch.

So, should employers serve alcohol at office functions? And if you do, what risks are involved and what steps can you take to reduce them? (See also Side Story.)

Parties where alcohol is served pose potential legal risks and costs not just for employees but for their companies. Recent court rulings in many states, for example, have held that an employer can be liable if an employee drinks alcohol at a company-sponsored party and then causes an automotive crash. Jury verdicts have ranged into the millions of dollars, particularly in cases in which a drunken employee causes fatal injuries to a third party on the way home from a company function, according to the Society for Human Resource Management. A company-sponsored party may be subject to claims under both workers' compensation and general liability insurance.

And there are other costs. Each time an employee is involved in an alcohol-related incident, businesses pay with increased absenteeism and use of health care benefits, according to the U.S. Department of Labor's Working Partners for an Alcohol-and Drug-Free Workplace. In fact, given that substance abusers in general are ten times more likely to miss work, 3.6 times more likely to be involved in on-the-job accidents, and five times more likely to injure themselves or another when they do have accidents, employers may want to think twice about what message they're sending to employees when they decide to serve alcohol.

The bottom line is that any social event brings with it the possibility of personal injuries, third party injuries and sexual harassment. But alcohol increases those risks.

Given all of that, many companies have begun to consider alternatives: "It's not that companies don't want employees to have a good time, but an alcohol-free party can also provide a good time," said Westaff Vice President and Human Resources Director Joe Coute.

In recent years, some have moved towards throwing family-oriented affairs in which they invite employees' children and Santa Claus makes an appearance. Other ideas include an indoor carnival, a group outing to an amusement park, or a volunteer activity with a local charity. Consider throwing a party at a posh restaurant with terrific food and a great atmosphere so that those features become the focus of the party (as well as the chance to socialize) rather than the alcohol or the lack of alcohol.

Of course, while the safest route is to forego alcoholic beverages and make it clear to employees that they may not bring alcohol to the office party, sometimes the choice is influenced by a company's or industry's culture. It's generally expected of high-powered sales or arts organizations, for example, to throw parties in which alcoholic beverages are served.

If you do decide to serve alcohol, there are steps you can take to cut down on the risks. First, be aware of your own state laws regarding alcoholic beverages at an office event and your potential liability. Also, those most likely to drive impaired — employees between the ages of 21 and 34 — are probably well-represented in your workplace. So, take advantage of the fact that they provide a captive audience for drinking-and-driving prevention messages. Then, get those messages out there via employee education sessions, organizational newsletters, payroll stuffers or workplace displays. At a sit down luncheon or dinner, you might consider allowing employees to enjoy some nice wine or champagne but limiting its consumption by placing just one bottle on each table for employees to share.

If, despite your company's best efforts, an employee does become inebriated during your office party, a manager or other senior company official should confront the employee and advise that in the manager's opinion too much alcohol has been consumed and the drinking needs to stop. If the inebriated person has become a risk to self or to others, then the manager should ask for the person's keys and call a taxi.

"In my opinion, a manager has a responsibility to the employees and to the company to intervene," Coute said. "But it should be done as tactfully as possible. Try not to make it into a confrontation-on-the-dance-floor type of incident that could create even more embarrassment for the employee and others."

Sources:

Society for Human Resource Management

U.S. Department of Labor's Working Partners for an Alcohol-and Drug-Free Workplace

Joe Coute, Westaff Vice President and Director of Human Resources