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10 Holiday Considerations for Employers

The holiday season of Thanksgiving through New Year’s Day is when several religious and secular holidays occur. While the accompanying festivities can fill many with joy, others can feel left out, and misunderstandings can occur – not to mention potential liability issues for employers. Avoid common holiday season pitfalls by following these ten guidelines.

1. Holidays Parties and Alcohol

Holiday parties are typically a highly anticipated time for employers to thank and celebrate their teams; this year, employers may be forced to rethink their party plans.

Whether in person or virtual, serving alcohol – or encouraging employees attending virtually to provide their own – during an event is an important consideration for employers. While a drink or two can help people relax and feel more at ease, excessive drinking is a major source of the problems that arise at corporate holiday parties, whether the celebration is in person or virtual. In many states, companies can also be held liable for employees’ drinking-related incidents even if the party happens off-site.

If you are planning an in-person holiday party this year, take the following simple steps to limit the potential for trouble:

  • Never host an open bar
  • Don’t allow employees to mix their own drinks
  • Limit the number of drinks someone can consume by using drink tickets
  • Hire a trained bartender who won’t overserve
  • Only serve beer and wine
  • Serve food and offer choices of non-alcoholic drinks

Supervisors should also set the tone by limiting their own drinking or designating someone to keep an eye on alcohol consumption among employees – and be prepared to arrange transportation home for employees if needed.

In addition, if in-person holiday parties are planned this year, employers may have additional obligations to ensure that safety protocols are maintained at all work events, including face coverings and physical distancing.

2. Don’t Forget About Marijuana

As cannabis legalization continues to sweep across the country, the question as to whether marijuana will be allowed, or even provided, at the holiday office party has come up! Like alcohol, employers may be held liable for behavior or actions resulting from cannabis use at company-sponsored events.   

Employer policies should address legal drug and alcohol use in the workplace and at employer-sponsored events. Ensure your policy prohibits supervisors from providing marijuana, even if it’s done outside on a “break” from the party. Employers should then ensure these policies are followed at the holiday party.

3. Reinforce Professional Standards

Holiday celebrations, particularly ones where alcohol is involved, can also provide a setting for joke-telling, lewd behavior, sexual advances, and other conduct that may be considered sexual harassment or harassment based on another protected status. Employers should reinforce their professional standards by reminding all employees that work rules still apply at holiday parties and related events. Managers should keep their eyes and ears open during any event to ensure a safe and professional event for all who attend.

Before any celebration (in person or virtual), it’s a good idea to redistribute company policies regarding appropriate behavior and remind employees that a holiday party (regardless of where it’s held) is an extension of the workplace. It is important to remember that “what happens at the office holiday party” doesn’t generally “stay at the holiday party.” HR teams must be prepared to respond promptly and treat complaints of sexual harassment seriously.

With many employees working virtually this season, employers may consider holding virtual holiday parties. Employers should remind employees that all company policies and expectations extend to the remote workplace.

4. Be Inclusive

People enjoy the holidays in different ways, and it’s important to be considerate of your workers’ varied backgrounds. Do not make religion a focus of your holiday party. The goal of most end-of-year celebrations is to show appreciation for employees. It’s important to be as accommodating as possible – but this doesn’t mean you string up every religious and secular decoration you can find. Although courts have ruled decorations such as Santa Claus or a tree to be secular in nature, consider a neutral theme, such as a winter wonderland theme. Similarly, ensure any music played in the workplace or at a work event is appropriate.

Additionally, many employees fear reprisals for not attending a company holiday party – whether in person or virtually. Make sure any communication about the party is clear about attendance. It’s best to make the party optional and remind supervisors not to take adverse actions against employees who decide to skip it. Plus, if the event is outside of work hours, there may be concerns about paying employees for their time. It is also important to include a variety of activities for those who abstain from drinking or won’t enjoy office games to make all employees feel included.

5. Decorations in the Workplace

While the holidays are a time of celebration for many employees, it is also a time to be mindful and respectful of the rich and diverse cultures present in the workplace. The display of holiday décor should be respectful and sensitive to employees and the public. In public workspaces, display only secular holiday decorations. Avoid religious symbols or holiday decorations with religious content. Employers should consider whether decorations with religious content will be allowed in private workspaces, such as private offices or cubicles. Employers should also identify a period of time before and after holidays for decorations to be put up and taken down. And don’t allow the hanging of mistletoe – just don’t.

The most important consideration regarding holiday decorations is SAFETY. Unfortunately, every year during the holiday season, fires claim lives and destroy property. Many of these fires were preventable. It is important to carefully consider the flammability and the potential fire risk of any decorations used.

Employers should also be mindful of decorations that may appear in the background of video calls or as someone’s virtual background. Employers should remind employees that the same policies and expectations apply to home workspaces.

6. Holiday Dress and In-person or Virtual Considerations

Besides holiday decorations in the workplace, some employees may feel extra festive and want to wear holiday apparel or accessories. 

Nevertheless, employers do have the right to make sure that any holiday apparel complies with internal dress code policies or professionalism standards. Employers should communicate expectations and ensure all employees follow dress code policies and standards at work and work events.

Similarly, employers should consider dress code policies for remote employees and expectations for virtual backgrounds. Employees may stretch the boundaries when working from home and may need a reminder that the remote workplace is an extension of the workplace, including appropriate dress code and backgrounds.

7. Keep Company Awards, “White Elephant” Gifts, and Holiday Cards Appropriate!

Some company cultures avoid the gift-giving season and don’t exchange office holiday gifts at all. Many employees don’t have the extra cash or don’t want to offend those who don’t celebrate holidays. However, if gift-giving or “white elephant” gift exchanges are planned, employers should consider setting some guidelines to avoid gifts that some employees may find inappropriate or misunderstand. Office gift-giving should stay professional and courteous.

Employers that provide end of year awards should consider the same rules and be aware that not everyone may find humor in funny trophies, and some may misunderstand creative messages.

Employers who have a tradition of sending holiday cards to employees, customers, and clients as a thank you for their contributions must be mindful that not everyone celebrates Christmas. The design and content of cards or emails must be appropriate for a diverse audience. In addition, if all employees are required to sign and use a particular holiday card given to clients, be mindful that the best practice would be to have the card be a neutral celebration rather than celebrating a specific holiday. And if employee photographs are being used in a holiday card sent by the company, ensure you have consent from the employee.

8. Religious Accommodation

When planning holiday celebrations, contests, and décor, be mindful that there may be people in your organization that will have difficulty participating due to their religious practices. For example, legal problems have arisen in workplaces where employees were required to answer the phones with a greeting of “Merry Christmas,” or change their email footers to say a particular holiday greeting, or attend a holiday celebration, despite the employee’s religious objection to such a celebration. If an employee states they have an objection to participating in a holiday event or display, you should consider if the employee is entitled to a religious accommodation.

To receive a reasonable accommodation from an employer, the employee must hold a religious belief and put the employer on notice that the religious belief conflicts with a workplace rule. Once that occurs, the employer and employee must enter into an interactive process – similar to that which occurs under federal and state disability accommodation laws – to find a reasonable accommodation.

The Equal Employment Opportunity Commission (EEOC) guidance on religious discrimination lists specific examples of possible accommodations, including adjustments to work schedules, flexible scheduling of arrival and departure times, breaks and lunchtime, voluntary substitutes and “swaps,” and lateral transfers. Other potential forms of accommodation identified by the EEOC include exceptions to dress and grooming rules, use of the work facility for a religious observance, and accommodating prayer and other forms of religious expression.

During the holiday season, as employees flood employers with requests for time off to attend religious services or observe religious holidays, employers may want to carefully consider the options to accommodate employees. Examples of common religious accommodations include flexible scheduling, voluntary shift substitutions, job reassignments, and modifications to workplace policies or practices. Employers may consider providing employees floating holidays to use throughout the year to observe their preferred holidays or allowing employees to swap with other employees the holidays they will work. A company may also consider approving an employee’s request to attend a religious service by allowing them to leave work early and then make up the time missed by working extra hours during the week. However, it is important to remember that some scheduling alternatives may implicate state wage and hour laws, so consider these issues when exploring accommodation options.

9. Getting and Giving Gifts – Be Aware of Taxable Income and Conflicts of Interest

The holiday season may be an excellent time for businesses to show their appreciation for employees and customers by giving them gifts or hosting holiday parties. However, it’s a good idea to determine whether the expense is tax-deductible and taxable to the recipient.

Generally, anything of value given to an employee is included in the employee’s taxable income (and, therefore, subject to income and payroll taxes). However, there may be an exception for noncash gifts that constitute “de minimis fringe benefits.” Common examples include holiday turkeys or hams, gift baskets, or employer logo merchandise. On the other hand, cash gifts — as well as cash equivalents, such as gift cards — must always be included in an employee’s income and subject to payroll tax withholding, regardless of how small and infrequent.

Employers should also be clear as to when a gift may create a conflict of interest. For example, a gift of more than a nominal value given from a customer or supplier to an employee may be seen as a conflict of interest. Employer policy should define what “nominal” means. Many employers define this as $25 or less. Now is a good time to check your conflict of interest or gift policies to ensure they are up to date and consistent with company practice.

10. Holiday Shutdowns and Holiday Pay

Some employers shut down their operations during holiday weeks such as the week between Christmas Day and New Year’s Day. Employers have a number of factors to consider before deciding to shut down operations, including:

  • Pay: Employers are not obligated to pay non-exempt (typically hourly) workers if no work is performed. If an exempt (salaried) employee works any part of the week, the employer must pay their weekly salary. However, if an exempt employee does not work at all the entire workweek, no salary needs to be paid. Employees may be required to use available paid vacation time off during a shutdown period, subject to state or local law.
  • Notification to Employees: It is advisable to let employees know as soon as possible if operations will be shut down. Similarly, if the employer expects employees to use vacation or other eligible paid time off during the shutdown period, that expectation should be promptly communicated as well.
  • Unemployment: Employees who are laid off without wages for all or part of a shutdown period are eligible to file for unemployment. Employers should not promise that an employee will receive unemployment benefits, as the state’s unemployment office makes the decision to award unemployment benefits, and there may be considerations unknown to the employer.
  • Holiday Pay: Employers are generally not required to pay employees holiday pay. A holiday is generally considered an employer-provided benefit, subject to the employer’s policies. Therefore, if a holiday occurs during a shutdown period, the employer’s policies or practices dictate whether the holiday is paid. However, keep in mind that an exempt employee who works any part of the work week must be paid their weekly salary.

To help manage your workplace obligations during the holidays, plan ahead, and have clear policies and procedures in place. Eligible Archbright members are encouraged to contact the HR Hotline with any questions or to seek specific guidance. Eligible members may also access Archbright’s sample policies, including holidays, anti-harassment, conflicts of interest, or drug-free workplace, along with various KeyNotes available on the Archbright Toolkit and mobile app. 

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Joy Sturgis, SPHR, SHRM-SCP

Joy has more than 15 years of managerial and director-level human resources experience in both manufacturing and service organizations. As an Archbright Content Manager, her responsibilities include creating and reviewing HR and legal content for all aspects of federal and Washington, Oregon and Idaho state employment law. She also supports our members with a variety of HR functions including HR advice and counsel, handbook and policy review, and employee development training. During her HR career, she has been responsible for leading HR strategies and functions for Washington companies as well as multi-state Business Units. Joy has a Bachelor of Science in Business Administration from Villanova University and a MBA from University of Phoenix.