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Updated May 17, 2024

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

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

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Sean Peek, Senior Analyst & Expert on Business Ownership
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Some businesses embrace the idea of allowing alcohol in the office to celebrate a big win, facilitate team bonding or offer an attractive perk for employees. Still, several serious and practical concerns must be considered when your business mixes work with drinking, such as insurance, legal considerations and cultural fit. That’s why it’s important to develop a thoughtful alcohol policy before you make office happy hours an official perk.

What is an office alcohol policy?

The founding principle of an office alcohol policy is to establish guidelines for responsible drinking in an office setting. If you’re thinking about instituting an office alcohol policy, here are a few points to address:

  • When the use of alcohol is appropriate on company property.
  • The importance of drinking responsibly and remaining fit for work.
  • Whether specific departments or roles, such as employees who operate or drive heavy machinery, are prohibited from drinking at work.  

How do you create an office alcohol policy?

To create an office alcohol policy, start by acknowledging the potential risks of allowing employees to drink while on the job or in the office. 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, consuming alcohol at work can have several repercussions, including absenteeism, increased healthcare costs, injuries or accidents on the job and damage to equipment or products. 

The impaired judgment that comes from alcohol consumption can also lower productivity, loosen inhibitions and result in inappropriate behavior.

“Employees who become impaired are more likely to say or do things that could lead to claims of a hostile work environment,” Robert Dominguez, corporate counsel for Ember Education, told us. “We’ve all heard horror stories about things that happen at company holiday parties. Now, imagine that scenario every Friday or every day.” 

If, after examining the potential risks, you decide that drinking at the office is worth exploring, follow these four steps.

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 to see if they are interested in an office alcohol policy or if they would prefer a different employee benefit, such as additional paid time off or the ability to bring pets to the office.

Did You Know?Did you know
Allowing employees to bring their pets to the office can help increase productivity by creating a healthy work-life balance. Having pets in the office allows employees to take mental breaks throughout the day to reduce stress, thus enabling them to accomplish more when they resume working.

2. Get legal advice.

“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,” Dominguez said.

An attorney will discuss your liability concerns, such as what happens if an employee drinks too much at work and gets into an accident driving home or injures or harasses a co-worker while intoxicated. 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 must adhere to the Drug-Free Workplace Act of 1988, which, among other stipulations, requires certification that your business is a drug-free workplace.

3. Secure the right insurance coverage.

Determine whether your insurance coverage permits alcohol to be served in the office or at off-site company events.

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

TipBottom line
Regardless of the type of business insurance coverage you have, you might be able to customize your policy to increase your liability coverage should you choose to implement an office alcohol policy.

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. Much like a visitor policy helps to protect your employees, data and guests, an office alcohol policy may help you avoid fines and other penalties for any statute breaches as well as potential litigation from employees. 

Even if you are not required by law to institute an official policy, developing one is imperative 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 the types of beverages that fall within company guidelines. Some workplaces, for example, allow beer and wine but not hard liquor. Others limit the number of drinks employees can have on a given day. They use tracking methods, such as hand stamps, tickets or an app to keep an eye on how much employees indulge.

The policy should also state the consequences of any infractions or violations. Consequences can include a host of disciplinary actions, termination or even the facilitation of an employee’s enrollment in an alcohol rehabilitation program. Be aware that employees with alcoholism are protected under the Americans with Disabilities Act (ADA). However, ADA rights do not prohibit these employees from being terminated if the situation warrants it. Still, it does mean they cannot be treated more severely for the same conduct or infractions as their co-workers.

TipBottom line
If an employee enrolls in a rehabilitation program, here are several ways you can support them in the office after rehab.

How do you implement an office alcohol policy? 

When you’re ready to implement the policy, follow these best practices:

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. For example, in addition to discussing your policy during new-hire orientations, you should review it with more seasoned employees during annual training. All employees should also be required to read and sign a copy of the company’s alcoholic beverage guidelines.

Provide transportation.

Have an arrangement with a taxi, car or ride-sharing service so employees who choose to drink at the office always have easy access to transportation that doesn’t put themselves or others in danger.

Don’t make it all about alcohol and always make drinking optional.

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

To avoid any perception of coercion, management should communicate that there is no expectation to drink. It’s also important to be aware that an environment where alcohol is present can be triggering for people who are recovering from addiction. Senior management should be ready to step in and support employees who may find this type of work environment challenging.

Offer access to an employee assistance program (EAP).

Your entire staff can benefit from access to an EAP that helps employees deal with challenging life situations, including dependent care and mental health issues. Moreover, an EAP can provide access to counseling, assessments and treatment referrals for employees who struggle with substance abuse.

Establishing this type of resource is the responsible action for any company that makes alcohol part of its culture, but it also makes sense from a fiscal perspective. According to the National Council on Alcoholism and Drug Dependence, alcohol and drug treatment is a worthy investment that pays for itself in reduced healthcare costs that begin as soon as people enter recovery.

Remember that moderation is key.

Ultimately, the goal is to arrive at a happy medium where employees enjoy their fair share of freedom while the company protects the integrity of its work and reputation. 

As workplaces become less rigid and find new ways to attract talent, more employees may kick off the weekend early with a few drinks in the office lounge or celebrate a new account with some beer or Champagne. As long as the drinking does not overshadow the work, it may become a standard employee perk at certain organizations. 

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

What are the pros and cons of an office alcohol policy?

Allowing alcohol in the office has some advantages and drawbacks. Before creating an office alcohol policy, it’s important to understand the pros and cons.

Pros of an office alcohol policy

  • It can incentivize employees to improve performance and may spark creative problem-solving: Instituting an office alcohol policy as an employee benefit helps make your workers feel appreciated, which is a win-win situation: When your employees feel valued, they’re more inclined to stay loyal to the company and that loyalty can boost productivity and overall performance levels. Another pro of allowing your employees to drink in the office is that it may improve creative problem-solving. A scientific study published in the journal Consciousness and Cognition found that slightly intoxicated people solved problems more creatively than people who hadn’t consumed any alcohol. 
  • It can foster strong employee connections: The primary goal of instituting an office alcohol policy is to help employees connect and develop more lasting relationships with one another. By having alcohol available in the office, employees may feel more encouraged to socialize with co-workers they otherwise might not have met.
  • It can attract talent: When you’re trying to attract new talent to the business, listing in-office drinking as one of the employee benefits you offer may stand out as a unique perk.

Cons of an office alcohol policy

  • It could compromise people’s addiction recovery and possibly cause other employees to develop a drinking problem: The office can sometimes be considered a safe zone for people who are recovering from addiction. Establishing an office alcohol policy could compromise the sobriety of those employees. It could also set employees down the path to developing a drinking problem if they become dependent on drinking at work, especially if they develop a habit of turning to alcohol when facing a workplace problem or challenge.
  • It could make those who don’t drink feel excluded: As mentioned earlier, allowing drinking in the office may alienate employees who do not drink. This unintentional exclusion can lead to uncomfortable personal conversations about why someone isn’t drinking or, worse, peer-pressure scenarios that may devolve into bullying.
  • It could increase the chance of sexual harassment and you’d be liable for any legal repercussions: When inhibitions are lowered, the risk of sexual harassment occurring increases with every drink consumed. If an employee were to press charges against a co-worker for assault or if an employee were to get into a car crash after drinking at the office, the company could be held partially or entirely responsible.

How does an office alcohol policy apply to remote employees?

If you’re developing an office alcohol policy for your business, be sure to consider how it will apply to employees who work remotely. It may seem like common sense to extend the same policy to your remote staff, but there are some additional considerations to keep in mind. For example, while you can closely monitor how much in-house employees drink, it’s almost impossible to do so for remote team members. Remote workers may also be more likely than in-office workers to drink during work hours.  

Did You Know?Did you know
In a study by Alcohol.org, 32 percent of Americans admitted to being more likely to drink during work hours while working remotely instead of in their typical office space.

If you’re looking to create an office alcohol policy for your business, consider taking the following actions to ensure your remote workers don’t feel excluded but aren’t tempted to abuse the policy:

  • Send frequent reminders to your entire staff about the consequences of abusing the office alcohol policy: While you may welcome occasional drinking at work, your office alcohol policy should outline specific instances in which drinking at work is inappropriate and the consequences of abusing the policy.
  • Develop comprehensive drug and alcohol training: If you’re planning to allow your employees to drink at work, you should also develop comprehensive drug and alcohol training. The training assessment should cover the effects of drug and alcohol abuse on the body, the risks such behavior poses to the organization and ways for employees and management to spot and address the warning signs of substance abuse.
  • Share available resources, such as your employee assistance program, with your employees and encourage them to prioritize their mental health: In addition to creating an EAP for your staff, share other resources for substance abuse and addiction, such as the Substance Abuse and Mental Health Services Administration’s national hotline at (800) 662-4357 and a list of reputable treatment centers.

Skye Schooley and Paula Fernandes contributed to this article.

author image
Sean Peek, Senior Analyst & Expert on Business Ownership
Sean Peek co-founded and self-funded a small business that's grown to include more than a dozen dedicated team members. Over the years, he's become adept at navigating the intricacies of bootstrapping a new business, overseeing day-to-day operations, utilizing process automation to increase efficiencies and cut costs, and leading a small workforce. This journey has afforded him a profound understanding of the B2B landscape and the critical challenges business owners face as they start and grow their enterprises today. In addition to running his own business, Peek shares his firsthand experiences and vast knowledge to support fellow entrepreneurs, offering guidance on everything from business software to marketing strategies to HR management. In fact, his expertise has been featured in Entrepreneur, Inc. and Forbes and with the U.S. Chamber of Commerce.
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