Post Loss Specialist
A favorite event for many companies is the annual company picnic. After a long winter and a year of hard work, taking a moment to celebrate is a great way to show employees how much you appreciate them. But have you stopped to consider the potential exposures that may arise from such an event?
I want to start by saying that we don’t want anyone to cancel their company picnic. We like barbeque and watermelon at HNI just as much as anyone. However, it is important to take risk into account when planning an all-company social event. From workers compensation claims, to impaired driving accidents, to sexual harassment, take into account the unique challenges and exposures that come along with your special event.
For example, if an employee face plants during the company kickball game, are they entitled to work comp benefits? The first thought of most people is “no way!” – but let’s stop and look at what a court would examine if determining whether a company event is considered within the course of a person’s employment. The court would ask:
Was participation in the event mandated [either overtly or implied]?
Does your company derive any direct benefit from the employee’s participation?
Does the event take place on company premises?
At what time of day does the event take place?
Many courts have concluded that if a company event is 1) purely voluntary, 2) is held off site, and 3) occurs after normal business hours of operation, an injury occurring during the event could not be considered conduct within the course and scope of a person’s employment. The courts’ stance on this makes sense right? If an employee volunteers to participate freely and outside of the workplace, why should the company be held liable for any injury?
If your event doesn’t meet all three of the above criteria, there may be some grey are in interpreting whether it can be considered within the scope of employment. Many companies, for example, want to hold their picnic or big event during the work day. In this case, consider whether any employees would lose a day of pay for not attending, or if they’d have to use PTO benefits. If so, then you may have just exposed your company to a workers’ compensation claim. You have implied through these consequences that you expect participation from all employees in the event, and your event would no longer be viewed by the courts as voluntary.
If you still want to hold your event during the work day and avoid exposure, first make it clear that attendance is purely optional. You must allow employees who chose not to participate in the event to work their normal work day and be paid just like any other day of the year.
In general, it is important that your company does not require attendance at company-sponsored events. Although state law can vary [and is never cut and dry], in general this practice will help your company mitigate its risk. When planning your picnic or other social events to wrap up the summer, take extra precautions to consider this. You will effectively reduce your company’s risk, while making your event safe and fun for all employees!