14 ways to minimize the business risk of employer-sponsored events

This time of year, we like to remind employers that injuries incurred during golf outings, employee picnics, employer-sponsored sports teams and other events can be considered workers’ compensation injuries if certain factors apply. While there are many gray areas and laws vary by state, here are 14 ways employers can minimize the risks:

  1. Make the activity truly voluntary. Let employees know attendance is optional and instruct supervisors and managers not to apply pressure to attend. Don’t require or encourage participation in anyway.
  2. Do not compensate employees for time spent at the activity.
  3. Plan events away from company premises and off company time.
  4. Distant company from activity. While the company may allow a team to use the corporate name, it’s important for the company to distant itself as much as possible from the activity. Let team members handle team formation, scheduling, equipment purchases, awards and so on. The activity should be considered social and not work-related.
  5. Recognize that if the company designates employees to organize the event, they may be viewed differently than all other employees. In 2014, there was a case that made it to the South Carolina Supreme Court, which involved an employee injured in a kickball game. The court found while attending the event may have been voluntary for the firm’s employees generally, it was essentially compulsory for the injured employee, who served as the firm’s Director of Creative Solutions and who had planned and otherwise organized the game as a team-building event.
  6. Limit financial support. While the company may help in purchasing equipment, uniforms, or refreshments, the smaller the financial commitment, the less likely it will be viewed as an extension of work.
  7. Don’t make morale building speeches or present awards at events.
  8. Do not invite customers, clients, or vendors to the event.
  9. Include company policy on athletic and social events in the employee handbook.
  10. Be careful how entertaining clients is worded in job descriptions. If the job description includes entertaining clients, a reasonable assumption is that the employer derives a direct business benefit from the activity. Refining the definition can help mitigate exposure.
  11. Seek legal advise on having employees sign waivers or releases. Recognize, however, that waivers do not provide all-encompassing protection.
  12. Do not serve alcohol.
  13. Be cautious about what events you ask employees to attend. The employer need not “host” the event for liability to exist. If an employer asks its employees to attend an event sponsored by a customer or a charity, workers’ compensation liability exists because the employer has required the employee to attend and will benefit from the goodwill generated.
  14. Treat all injuries consistently.

In determining liability, each case will be considered on its own merits. Key questions will be whether or not an injury during an event is ‘in the course and scope of employment,’ if the employee was obligated to attend the event, and, if the employer derived a direct business benefit from the activity beyond the intangible value of improvement in employee health and morale that is common to all kinds of recreation and social life. While there is no ironclad way to avoid liability, following these practices can reduce exposure.

For Cutting-Edge Strategies on slashing Workers’ Compensation Costs visit www.PremiumReductionCenter.com

David Leng, CPCU, CIC, CBWA, CWCA, CRM

Author | Speaker | Certified Risk Manager | Certified Work Comp Advisor

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