The holiday season is officially here, and many California employers are planning in-person celebrations to close out the year. Although these events can be a wonderful way to boost morale and strengthen connections, they also create legal risks if not handled carefully. From alcohol-related issues to harassment claims to wage-hour compliance, holiday parties are more complicated than they may appear.

Here are the key risks — and how you can stay off the naughty list.

1. Alcohol Creates Predictable (and Preventable) Problems

Even a single glass of wine can blur judgment. In California, employers can face liability for:

• Alcohol-related injuries if someone drinks too much at a company-sponsored event and later causes harm
• Off-hand comments or inappropriate behavior that may qualify as unlawful harassment
• “After-parties” that employees claim were part of the employer-sponsored event

Practical tips:

• Use drink tickets, hire professional bartenders, and offer plenty of non-alcoholic options
• Consider hosting the event during the day (or as a lunch)
• Make it clear in advance that after-parties are not employer-sponsored

2. Harassment Claims Spike During the Holidays

Holiday parties blend work and social settings — a perfect storm for misunderstandings and boundary-crossing. Under the Fair Employment and Housing Act (FEHA), employers can be liable for harassment at work-related events, even if attendance is voluntary and off-site.

Common issues include:

• Off-color jokes or comments
• Unwanted touching or overly friendly behavior
• Party photos or social-media posts that cross the line

Practical tips:

• Send a friendly reminder beforehand, reinforcing respectful behavior expectations
• Ensure leaders model appropriate conduct
• Designate managers to discreetly monitor the event

3. Wage-Hour Traps: Paid Time, Travel Time, and Attendance

If attendance at the event is required — or if employees reasonably believe it is — the employer may owe wages for the time spent at the event. Other wage-hour pitfalls include:

• Requiring non-exempt employees to staff the event without compensating them
• Asking non-exempt employees to set up or clean up without tracking hours
• Failing to reimburse travel time if the event is off-site and mandatory

Practical tips:

• Clearly state whether attendance is voluntary
• Track all time worked for non-exempt employees, including setup and breakdown
• Pay non-exempt employees for travel time if the event is required and off-site

4. Gifts, Raffles, and Recognition: Tax and Fairness Issues

Employee gifts may be taxable compensation depending on the value and type. Raffles and recognition programs can also create unintended issues if employees feel excluded or unfairly treated.

Practical tips:

• Keep gifts modest and equitable
• Check tax rules for gift cards and cash equivalents
• Avoid contests or raffles that could be viewed as discriminatory

5. Protect Your Culture — Not Just Your Liability

Holiday parties reflect your organization’s values. Employers who set clear expectations and create safe, inclusive events reduce legal exposure and build trust.

Consider:

• Including employees of different shifts and locations
• Take steps to make non-drinkers feel fully included
• Offering accessible venues and activities

Final Thoughts

A well-planned holiday party can be a fantastic way to end the year on a high note. By setting expectations, managing alcohol, monitoring behavior, and complying with California wage-hour rules, employers can celebrate confidently — without inviting unnecessary risk.

If you’d like help reviewing your holiday party communications, policies, or manager talking points, our team is here to help.

Happy almost Thanksgiving!

About Shaw Law Group 

At Shaw Law Group, we do more than practice employment law—we partner with employers to build compliant, respectful, and productive workplaces. From day-to-day advice and counsel to impartial workplace investigations, proactive HR audits, dynamic training programs, and sensitive pre-litigation matters, our experienced team helps clients stay ahead of the curve—and out of court.