THE BLOG
12/17/2013 02:07 pm ET Updated Feb 16, 2014

Five Holiday Party Do's & Don'ts for SMBs and Employees

The holidays are upon us, which means it's time for small businesses owners to come together with their employees to celebrate a year's worth of hard work. According to Rocket Lawyer's semiannual index, more than half of small businesses experienced growth in 2013 and an overwhelming 80 percent believe 2014 will be even better -- so there is plenty to celebrate.

Often, this takes the form of a company holiday party. While this should be a fun event to reward their employees for all that they do, small business owners would be wise to take all necessary legal precautions to ensure they ring in the New Year with as few holiday headaches as possible.

Here's an interesting, but perhaps unsurprising statistic: alcoholic drinks are served at 79 percent of office parties, according to a 2012 survey by Battalia Winston. Though serving adult beverages at your party is a sure way to spice it up, this also can lead to inappropriate behavior and dangerous driving. This can not only cause legal strife, but also place your employees in physical danger and threaten your company's well being.

Here are five ways you can keep it classy, protect your employees and avoid legal worries this holiday season:

1. Get a Gift from Uncle Sam. Expenses for your holiday party should be tax deductible, as long the party isn't overly lavish or wholly unrelated to work activities. But stay organized and keep those receipts. You never know when you might run into a Grinch-like IRS agent who doesn't share your holiday spirit.

2. Make Sure You're Driving the Sleigh. One of the biggest legal mistakes small businesses make is not getting an agreement in writing. When you're planning your party, make sure you have contracts with all of your holiday vendors from the DJ to the caterer that clearly state payment and cancellation policies.

3. Don't Get Caught Underneath the Mistletoe. Nearly 45 percent of Americans have experienced someone sharing inappropriate personal details about themselves with a coworker or supervisor at a work event, according to a 2012 study from Caron Treatment Centers. Make sure you have a game plan in place for how to handle inappropriate behavior that could potentially lead to a sexual harassment claim when spirits are high and alcohol is served.

4. Check Your List Twice. Often, event spaces will require you to release them from liability at a holiday party. If something happens, like someone slips while dancing, you need to have liability insurance to cover it. Check with your current business insurance policy to see if it's something your current plan will cover, or if you need to purchase a short-term policy.

5. Keep an Eye on the Eggnog. If alcohol is served at a company event, small businesses can be liable for accidents that happen on the way home. It's wise to offer cabs and coordinate designated drivers in advance of the party to protect everyone's safety - 57 percent of workers have witnessed a fellow partygoer drive under the influence according to the same Caron survey. A great way to help avoid this is to take advantage of Uber's Holiday Party promotion, which gives everyone a free first ride (up to $25) to or from your holiday party. Also consider serving food, and limit the amount of the time the bar is open to keep things from getting too jolly.

Lisa Honey is the Business Lead for Rocket Lawyer's Legal Documents business line. She left the traditional practice of law after seven years in commercial and civil litigation to join Rocket Lawyer. She's licensed in California, Texas, and Arkansas.