December brings with it a mixture of emotions both positive and negative, particularly for HR departments, Jonathan Segal, partner and managing principal at Duane Morris said during a Nov. 21 virtual event.
“It’s often said that it’s the most wonderful time of the year, but not necessarily for those who are in HR,” Segal said.
That’s in part because of the potential for misconduct at company-sponsored holiday parties, which have rebounded in popularity during the post-pandemic era. But there are many other issues to keep tabs on, from wage-and-hour classification of seasonal bonuses to ensuring respectful use of decorations. Segal’s presentation covered a variety of best practices for HR to consider.
1. Allowing inappropriate gift-giving
Employers might want to circulate a reminder to employees not to give anything sexual, suggestive or that violates an organizations’ harassment policies. Segal recalled one instance in which a client’s employee gifted a Victoria’s Secret item to a secretary. “I wish we’d reminded him,” Segal said. Prohibitions could also extend to political gifts, even if employers are wary about curtailing political speech at work.
Segal added that employers should make clear that employees must avoid gifts to politicians that could create a conflict of interest without prior approval from a general counsel or chief compliance officer, even if such gifts are not intended as bribes.
Gifted alcohol can be a bit trickier to manage. Segal said employers may not want to tell employees to throw away a bottle of wine they received from a colleague, but instead, they can instruct them not to drink it at work and take it home the same day they receive it.
“And I think we can all agree — I don’t know if you need to add it — but when it comes to weed, none in the workplace, never appropriate as a gift,” Segal added. “That includes edibles.”
2. Excluding certain holiday payments from overtime calculations
The Fair Labor Standards Act does provide exceptions for sums paid as gifts, which do not need to be included in an employee’s regular pay rate for overtime calculation purposes. In order for the payments to be excludable, though, employees must not have a contractual or legal right to them, Segal said, and they cannot be measured by or dependent on hours worked.
Such payments also cannot be so substantial that they are considered part of the employee’s wages, he added. Bonuses calculated based on categories such as production or efficiency are therefore not excludable, Segal said, and neither are sums that equal an entire month’s worth of pay.
Bonuses may otherwise be excluded under the FLSA even if they are paid with regularity to the point that employees can expect them and even if different amounts are paid to employees based on position type or length of service, Segal said.
State laws add another wrinkle. For example, California law requires employers to count bonuses toward an employee’s regular rate if they are led to expect it, Segal said, and other states are just as restrictive, if not more so.
“It’s nice to give your employees bonuses and I actually encourage you to do so,” Segal said. “I don’t want you, out of your goodness, to end up with an FLSA claim. If you’re not sure whether you can exclude it from the regular rate of pay, please make sure that you include it.”
3. Letting holiday parties get out of control
In the minds of some attorneys, the safest way to reduce the risk of inappropriate holiday party behavior is to simply not have one. Yet many employers find that the events boost retention and camaraderie among employees and can serve as a way to show appreciation for what they do.
HR should monitor things to ensure employees behave responsibly, especially where alcohol is involved and people might do things they otherwise wouldn’t, Segal said.
Additionally, if the employer has a band or DJ working the party, it might be okay to check the song list in advance — or curate a playlist themselves and run it by a diverse group of people in the organization to gather their thoughts. That’s because dancing is an especially tricky area to navigate.
“In one of my favorite examples, a client told me that an employee was putting her hands down in the pants of the guy in front of her when doing a line dance,” Segal said. “That sounded like a real problem, but the real problem was that he really wasn’t wearing pants.”
Segal said he strongly advises employers to make clear that they will not sponsor, fund, nor attend any after-parties. That is because the events sometimes create opportunities for sexual assaults, sexual encounters and drug use, none of which are positive developments for HR to deal with.
“Nothing good happens at an after-party,” Segal said.
Employers also can include explicit language that attendance at after-parties is not required and that anyone who feels pressured to attend should let the employer know, he added.
On alcohol, it’s important to state up front that consumption by attendees under age 21 is prohibited, Segal said. Employers could go further by setting a limit on consumption for all attendees, i.e. by a certain number of drinks per guest enforced by a hand stamp or other topics. Employers also could enforce this by limiting the number of servers and eliminating self-service options.
Other tactics include ensuring cab vouchers are available, serving plenty of food and non-alcoholic drinks, shortening or eliminating happy hours and requiring employees to pay for their drinks — and perhaps matching employees’ drink costs with a donation to charity.
Employers can direct servers to be aggressive in flagging guests who have had too much to drink and ask managers to aid in monitoring for impairment — and take employees’ car keys away if necessary.
“I like saying to servers, ‘flag aggressively, and if you have any concerns about anyone’s fitness to drive or otherwise, contact a designated person,’ and let them know who that person is in your company,” Segal said. “Managers, ideally, should receive that same admonition.”
Should a designated person need to confront someone who is drunk, Segal said that the designated person should ask for the guest’s keys and, if the guest refuses, inform them that the police will be contacted.
4. Being inconsiderate about decorations
Decorations are always a difficult issue, Segal said, “because whatever you post may not be enough, and whatever you post may offend some.”
The legal standard is not that employers should get rid of decorations that could make employees the slightest bit uncomfortable, he noted, but rather whether they could make an employee reasonably uncomfortable to the point that this affects the employee’s workplace.
“Walking past a beautifully decorated pine tree — I don’t think a reasonable person should be [made] uncomfortable by that,” Segal said. “Requiring someone who is an atheist to have decorations on their desk? That’s a different story.”
Employers can take a wide array of approaches toward decorations. One option, Segal said, is to consider including religious symbols that represent all holidays celebrated during the season — e.g., a Christmas tree for Christmas, a menorah for Hanukkah, a harvest basket for Kwanzaa, and a Bodhi tree to represent Bodhi Day in Buddhism.
“Yes, size matters,” Segal said. “[I]f you have an 18-foot oak tree and menorahs that you could trip over [because] they’re so small, then that might send a message. Placement might send a message.”
The goal, Segal said, is for employers to use decorations that are as reflective of each holiday as reasonably possible.
As for decorations put up by employees, employers can place restrictions but should ensure that the same standard applies regardless of the religion that the employee is celebrating, Segal said. But employers also should consider how granular they want those restrictions to be. It may be better, he noted, to use phrases such as “generally” and “ordinarily” when setting guidelines in order to ensure flexibility when faced with special circumstances.
“Are we better off setting up rules about what’s [allowed] on the inside of the door [versus] what’s on the outside of the door, small versus big […] or is it better to simply say I’m going to be reactive on this one,” Segal added. “If I see something that’s problematic, I’m going to respond, and I’m going to make sure I do so universally.”