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Drinking on the Job: Small Business Guide to Creating an Office Policy

Paula Fernandes Contributing Writer
Aug 27, 2018

Serving alcohol in the office can be a nice perk, but there's a lot to consider first.

From insurance and legal concerns to cultural fits, make sure you think ahead before making office happy hours an official perk.

As businesses work to distinguish themselves from the pack and provide unique incentives to impress employees and clients alike, some have turned to serving alcohol in the office as a way to broaden their appeal. The ad agency J. Walter Thompson, for example, has a 50-foot-long bar in its New York office. At the Yelp headquarters in San Francisco, a kegbot dispenses beer and lets employees leave a review of the brew.

Though few companies can provide such exorbitant perks, even small businesses are finding ways to integrate alcohol into the workplace, in the hope it will help them create a relaxed and connected atmosphere. But before you start pouring the drinks, you need to assess all the ways becoming an alcohol-friendly workplace can impact your business and develop comprehensive policies in response.

Where to start

Start by acknowledging the pitfalls of drinking on the job. Alcohol should be off limits in any industry where there is a high probability of causing serious injury to oneself or others, such as healthcare, construction and transportation. But even in industries where employees aren’t making life-and-death decisions, consumption of alcohol at work can result in absenteeism, increased healthcare costs, injuries or accidents on the job, and damage to equipment or products, according to the National Council on Alcoholism and Drug Dependence (NCADD)

The impaired judgment that comes with alcohol use can also lower productivity, loosen inhibitions and result in all sorts of bad behavior.

“Employees who become impaired are more likely to say or do things that could lead to claims of a hostile work environment,” said Robert Dominguez, assistant general counsel and human resources consultant for Engage PEO. “We’ve all heard horror stories about things that happen at company holiday parties. Now imagine that scenario every Friday or every day.” 

With the National Institute on Alcohol Abuse and Alcoholism reporting that about 3 in 10 U.S. adults drink at levels that elevate their risk for alcoholism, liver disease, and a variety of physical, mental and social problems, you really need to consider whether the benefits of having alcohol in the office outweigh the perils for most of your staff. 

Sophie Miles, CEO and co-founder of CalculatorBuddy, considered all these drawbacks when her company was reassessing its own alcohol policy. “We learned from our research that a happy hour at work creates a more relaxed atmosphere, fosters unification among workers and, in general, increases job satisfaction, which is reflected in productivity levels,” she said. “However, we believe that this practice could easily get out of control. There is a risk that some employees may take too much or that the company may seem too permissive and employers lose seriousness.”

If, after examining all the potential hazards, you decide that drinking at the office is still worth exploring, here are some best practices.

1. Consider your company culture.

If your employees commonly go out for drinks to celebrate a new deal, unwind at the end of a busy week or entertain clients, you may already have an alcohol-friendly workplace. If this is the case, it makes sense to establish a formal alcohol policy.

Reach out to your employees and find out if this is something that appeals to the majority of them or if they prefer some other perk. Miles’ company, for example, conducted three employee surveys to assess interest and reviewed the issue with human resources before settling on a policy.

“The first step for any employer who is considering serving alcohol at work is to speak to an attorney who specializes in personal injury defense to get a full understanding of the risk picture,” said Dominguez.

An attorney will help you review your liability concerns, such as what happens if an employee drinks too much at work and gets in an accident driving home or injures a co-worker. Additionally, an employment attorney will help you comply with all applicable regulations and laws.

For example, if you are a federal contractor or your company performs certain types of work, you need to adhere to the Drug-Free Workplace Act, which requires you to certify that you are a drug-free workplace, amongst other things.

3. Secure the right insurance coverage.

Companies need to take a look at their insurance to determine whether their coverage allows the serving of alcohol in the office or at offsite company events.

“Employers would be wise to review their insurance policies, especially their commercial general insurance and workers’ compensation,” said Dominguez. “By serving alcohol at the worksite, employers may be unwittingly destroying or severely limiting their coverage.”  

4. Develop a written alcohol policy.

Research federal and state laws to determine if your business is required to have a drug and alcohol policy in place. A policy may help you avoid fines for any statute breaches, as well as potential litigation from employees. 

Even if you are not required by law to have a policy, it’s imperative to develop one if you are thinking of making alcohol a part of your office offerings. Your policy should explicitly indicate the amount, times and places where it is acceptable to drink, as well as what types of beverages fall within company guidelines. Some workplaces, for example, allow beer and wine but no hard liquor. Others limit the number of drinks an employee can have on any given day. They use tracking methods such a stamp on a hand, a ticket or even an app to keep an eye on how much employees indulge.

“Limit the consumption,” advised Miles. “It’s about relaxing, not getting drunk.”

The policy should include consequences for any infraction or violations. This can include a host of disciplinary actions, termination or even facilitating an employee’s enrollment in an alcohol treatment program. It’s important to be aware that an employee suffering from alcoholism is protected under the Americans with Disabilities Act. This does not mean that alcoholics can’t be fired, but it does indicate that they must not be treated more severely for the same conduct or infractions as co-workers who aren’t alcoholics.

5. Educate employees about your alcohol policy.

“We incorporate informal rules into onboarding,” said Taylor Toce, president and CEO of Velo IT Group, whose employees have access to a beer-stocked refrigerator. In addition to discussing your policy during new-hire orientations, you should review it with more seasoned employees during annual trainings. All employees should be required to read and sign a copy of the company alcoholic beverages guidelines.

6. Provide transportation.

Have an arrangement with a taxi, car or ride-sharing service so employees who have one too many drinks always have easy access to transportation without getting behind the wheel and putting themselves or others in danger.

7. Don’t make it all about the alcohol, and always make it optional.

“Alcohol is an incentive, but it should not be the only one,” said Miles. “If so, employees who do not drink may feel left out.”

Companies can temper the availability of alcoholic drinks in the office by also providing a range of snacks and a variety of appealing nonalcoholic beverages. This helps ensure that employees who can’t drink or don’t want to for personal, health or religious reasons don’t feel excluded, which would defeat the original purpose of allowing employees to drink (bonding and camaraderie).

Management should clearly communicate that there is no expectation to drink to avoid any perception of coercion. Also, it’s important to be aware that an environment where alcohol is ever-present can serve as a relapse trigger for alcoholics in recovery. Senior managers need to be ready to step in should this become a clear challenge for an employee.

8. Offer access to an employee assistance program.

Your entire staff can benefit from access to an employee assistance program (EAP) that helps employees deal with all sorts of life situations, including dependent care and mental health issues. Employees who may struggle with excessive drinking will find this to be an especially valuable resource for its counseling, assessment, and referral services for alcohol or drug treatment.

Putting a resource like this in place is the responsible action for any company that makes alcohol part of its culture, but it also makes fiscal sense. According to NCADD, alcohol and drug treatment is a worthy investment that pays for itself in reduced healthcare costs that begin as soon as people enter recovery.

9. Remember moderation is key.

Ultimately, it’s about arriving at a happy medium where employees enjoy their fair share of freedom while the company protects the integrity of its work and reputation. After much research, Miles’ company, for example, decided that instead of allowing alcohol in the office, it would pay for the first round of drinks at a nearby bar every Friday. 

“It is an event that can be attended or not without obligation and is totally free,” Miles explained. “We did the calculations, and paying a drink to each employee in our small business was much less than the cost of allowing alcohol in our workspace.” 

As workplaces become less rigid and find new ways to attract talent, more employees may find themselves kicking off the weekend early with a few drinks in the office lounge or celebrating a new account with a shot of whiskey. As long as the drinking does not overshadow the work, it may become a standard employee perk in certain organizations.

“A little imbibing makes for a happier team, improves overall morale, and fosters internal connections by giving employees a chance to bond,” said Toce.

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Paula Fernandes Contributing Writer
Paula is a New Jersey-based writer with a bachelor's degree in English and a master's degree in education. She spent nearly a decade working in education, primarily as the director of a college's service-learning and community outreach center. Her prior experience includes stints in corporate communications, publishing, and public relations for nonprofits. Reach her at