As the winter holidays approach and employers prepare to celebrate with their workforce, it’s important to remember the potential legal fallout that can accompany celebrations gone awry, HR and legal experts say.

Through the years, companies have faced allegations of sexual harassment, discrimination and violating workers’ rights to free speech and religious expression, based on everything from decorations and gift exchanges to alcohol-fueled company parties.

To help keep organizations out of court, employment attorney Jonathan Segal recently offered recommendations on celebrating safely during a webinar titled “Preparing for the Holidays: Navigating the Shards of Glass!”

“There’s law, and there’s culture,” said Segal, a partner and managing principal at employment, labor, benefits and immigration law firm Duane Morris. “As employers, we need to look at both.”

While some employers skip holiday celebrations to avoid legal headaches, Segal suggests planning carefully to mitigate risk while taking advantage of seasonal goodwill to build important employee connections.

“The holiday season is a great opportunity to think about increased inclusion,” he says. “There’s so much joy that can come from sharing customs and sharing holidays and celebrations.”

Here are six suggestions for ensuring happy holidays for all.

Embrace decorations

Segal says that decking the office halls is an excellent way to share customs and promote inclusion. Start by inviting input from employees and ERGs on the type of decorations they would like to see, he suggests. Then, make careful selections, remembering that choosing secular decorations over religious ones is better.

“Put up that beautiful Christmas tree,” Segal recommends, “but please also put up a Hanukkah menorah, a ficus tree for Bodhi Day [the Buddhist holiday celebrated Dec. 8], and a basket with crops for Kwanzaa.”

And it’s best to avoid nativity scenes and Buddha statues or anything else that carries religious meaning, he says.

Consider holiday bonuses

Millions of employers have long given employees a holiday bonus as thanks for a year of hard work. These generally are simple to execute and widely appreciated, but employers should be aware of some special circumstances.

Bonuses can affect overtime rates for non-exempt employees who earn overtime, change IRS tax withholdings for employee wages and cause other issues. State laws vary, as well, so Segal recommends that HR professionals understand the laws and regulations around bonuses and use caution.

Give gift certificates

Many companies give employees modest gift certificates, like a $15 Starbucks card or a $25 Uber Eats card, thinking they can avoid saddling their employees with taxable income, unlike cash bonuses, Segal says.

However, regardless of dollar value, gift certificates are considered taxable income under IRS rules. Segal suggests HR leaders save themselves some work and simply give a larger gift certificate: one for $100 vs four for $25 each. Either way, employers would need to add the amount to the employee’s W-2 wages and face similar consequences if they don’t.

Support holiday gift exchanges

Holiday gift exchanges in the workplace are likely to increase with more employees returning to offices. These can be fun and low-cost celebrations, but guidelines for appropriate gifts should be shared in advance with co-workers, vendors and customers, Segal suggests. This will help minimize potential sexual harassment or conflict-of-interest concerns.

He recommends distributing a memo that outlines appropriate gifts, reminding employees to avoid sexually suggestive gifts and anything that does not comply with the company’s anti-harassment policy.

The memo also could remind employees that any gifts they give to clients or customers during the holidays are still subject to the company’s conflict-of-interest policies, he says. “You don’t want to let employees have the ability to decide when it’s a bribe and when it’s not,” Segal says.

He adds that you can further strengthen the messages in your memo by including links to company policies.

Close the office with care

Employees often like getting a few extra days off between Dec. 25 and Jan. 1. But companies that close and don’t pay workers can put themselves at legal risk, Segal says, so use caution.

Exempt employees, for example, who are required to work for any portion of the office closure week, could deserve a full week’s wages, regardless of how many hours they put in.

Even a worker who simply sends a work email during an office shutdown would be working, which could trigger payment for a full week of work for that employee, says Segal. Employers who refuse could face fines, penalties and lawsuits.

“If they do any work during that week, you have to pay them, full stop,” Segal says.

Throw holiday parties

Have a party, but be aware that these also can set the scene for allegations of sexual harassment, discrimination and other claims, Segal says. He suggests that HR leaders take pre-emptive action, reminding employees ahead of time that all workplace rules of acceptable behavior will be expected at the event.

Managers and others, he says, can encourage employees to attend but should avoid pressuring or requiring them to be present. If the party is held during work hours, employees are to receive pay as usual whether or not they attend the party, Segal notes.

When selecting holiday music, lean toward pop music rather than religious songs, Segal says. Think Santa Claus Is Comin’ to Town instead of Silent Night or Hanukkah O Hanukkah.

Although it might sound over the top, Segal recommends that HR assign monitors to watch for inappropriate dancing, which could lead to sexual harassment claims, and for intoxicated employees, who could leave the company liable if they drive drunk. He says that employers should consider offering vouchers for free rides home and take other measures to prevent intoxicated employees from driving.

And when it comes to after-parties, employers should avoid sponsoring, reimbursing expenses for, or attending after-parties, says Segal. “It would be safer,” he says, “to swim with piranhas with a bleeding leg than to go to an after-party.”

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