The main risk that office holiday parties presents lurks in a bottle.  Several states have "social liability" laws, which make a party host liable for injuries and damages caused by an intoxicated guest to whom the host has served alcohol.  In those states, an employer could be liable for an accident caused by an employee who drank at an office party, or if the conditions of employment contributed to the accident.  For example, in North Carolina, an employer can be held liable for injuries caused by a drunk driver if the employer served the person alcohol and knew or should have known that he was drunk and would be driving. 

Virginia does not have a social liability law.  Generally speaking, a Virginia employer who hosts a party is not liable for the drunken acts of its employees and guests if attendance at the party is strictly voluntary and not compensated and the party is not during regular work hours.  Virginia employers should still be cautious when serving alcohol, however, lest their party becomes the test case that leads Virginia to change the law.  And no one wants an employee to have an accident, regardless of legal liability. 

Apart from being a danger behind the wheel, some employees and guests who have had too much to drink may pose a risk to your business while they're still at the party.  Once the alcohol starts flowing, someone is bound to say or do something stupid.  One employee's drunken flirtation could lead to another employee's sexual harassment claim against your business. 

Some of your employees may object to alcohol, either for religious reasons or because they have had past problems with drinking.  You should make clear that attendance at the office holiday party is voluntary, and that you will not reward or penalize anyone based on whether they attend.

In addition to alcohol, you should also give some thought to general safety at the party.  While an employee usually cannot sue an employer for a work-related injury because of workers' compensation law, that law generally does not apply if the injury occurs in the pursuit of a social or recreational activity.  An employee who is injured at your office holiday party may be able to sue your business. 

Another issue is whether your party will be a Christmas party.  Employees who don't celebrate Christmas may feel excluded or marginalized if the office party involves Santa, a tree, and Christmas carols.  While a Christmas party by itself would not constitute discrimination under the law, it could contribute to a religious discrimination claim.  A religious-neutral party will help your entire staff feel welcomed.

Here are some tips to reduce office holiday party problems: