Don't Lose Your Shirt at Office Holiday Party

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Published November 29, 2012

| FOXBusiness

The holiday office party is a time for employees to let loose and revel in the festivities, but for small business owners it may also be the time to get slapped with a lawsuit if the revelry gets too out of hand.

Here are five tips from Rocket Lawyer on how to keep your business from ending up on the naughty list, which can cost you a lot more than getting some coal in your stocking.

No. 1: Deduct your holiday party within reason

For many people the holiday office party is simply an extension of the work day and an opportunity to network and build relationships. Because it is business related the expenses associated with the party can typically be deducted come tax time, according to Charley Moore, founder and executive chairman of Rocket Lawyer.

If your idea of the holiday party is taking senior executives to Las Vegas for a weekend, chances are it won’t count as a legitimate business expense, but having a holiday party at a local restaurant where the entire staff is invited could be deductible.  

“Expenses for your holiday party should be tax deductible, as long the party isn't overly lavish or wholly unrelated to work activities,” says Moore.  “But stay organized and keep those receipts...you never know when you might run into a Grinch-like IRS agent who doesn't share your holiday spirit.”

No. 2: Stay on top of the planning

Who has time to plan a holiday party when they are busy running a business? But turning that responsibility over to someone else could put you in a legal bind if things run afoul. Whether it’s the venue, the caterer or the DJ, Moore says it’s important to have contracts that spell out everything including the payment and cancellation policies in writing. After all, you don’t want to get stuck footing the bill for lobster when you ordered pigs in the blanket.

“The biggest legal mistake small businesses make is not getting an agreement in writing,” says Moore.

No. 3: Mistletoe must go

While hook ups between coworkers aren’t illegal, and are common at work events, it could set your business up for a sexual harassment suit if the pursued doesn’t want to be pursued. Instead of reacting, Moore says to be in proactive mode ahead of the party.

“Make sure you have a game plan in place for how to handle inappropriate behavior that could potentially lead to a sexual harassment claim when spirits are high and alcohol is served,” says Moore.

No. 4: Make sure you’re protected

If you are having your party off-site, chances are the venue is going to make you sign a release form, making you liable if anyone gets hurt during the party. That means if someone slips and falls on the buffet line or a fight breaks out on the dance floor -- you’re going to be liable. That’s why Moore says it’s important to check your current liability insurance policy to make sure you are protected. If not, Moore says you can purchase a short term policy to protect yourself and the business.

No. 5: Create a safe drinking environment

Small business owners may not realize it, but if alcohol is served at the holiday party, they could be liable if a drunken employee gets into a car accident on the way home. Since the alcohol is usually flowing at many holiday work parties, Moore says to provide staff with cabs or coordinate designated drivers ahead of the party.  

“Consider serving food, and limit the amount of the time the bar is open to keep things from getting too jolly,” says Moore.

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