Alcohol at Work: What HR Should Know

April is Alcohol Awareness Month, so it’s a good time for HR to take a closer look at how alcohol at work can affect a company’s culture — and its bottom line.

Alcohol-related issues can ripple through the workplace, affecting both employee well-being and overall organizational health. But the consequences go beyond culture and morale; they come with a hefty price tag.

Workplace alcoholism and alcohol abuse amount to lost productivity, healthcare costs, traffic accidents and personal tragedies totaling between $33 billion to $68 billion annually, according to the U.S. Office of Personnel Management.

The Role of Alcohol in Modern Work Culture

When people think of alcohol at work, they might picture an open bar at a company party or beer in the office fridge. But the concept has expanded in recent years.

Alcohol in the workplace now often includes team happy hours, networking events, client dinners, celebratory toasts, and even virtual mixers where drinking is encouraged.

These practices are often framed as tools for team bonding or culture-building, especially in industries where informal interactions are common. But while these activities may seem harmless — or even beneficial — HR professionals must evaluate their impact from both a risk and inclusion standpoint.

Not every employee will feel comfortable or safe in alcohol-centered environments, and unchecked use can open the door to compliance issues, safety concerns and employee disengagement.

Employee attitudes toward alcohol at work are changing — and Gen Z is leading the shift.

Gen Z has been labeled the “sober curious” generation, as they’re drinking less than their older colleagues. Why the shift?

Nearly two-thirds of Gen Z participants said they were “concerned about the emotional impact” of drinking and said they’d like to learn more about “drinking mindfully.” In fact, an overwhelming majority (86%) of Gen Z consumers “believe that their mental health is as significant as their physical health when considering drinking alcohol,” according to Forbes.

The question remains: Should alcohol at work be the norm? Let’s look at the pros and cons.

Pros of Alcohol at Work: Supporters Highlight Benefits

Are there any upsides to allowing employees to drink alcohol at work? Some companies argue that alcohol in the workplace offers real benefits. For example, they say alcohol at work may:

• Help employees bond and connect. Having a beer or a glass of wine with co-workers at the office can be a form of networking.
• Provide a temporary release from workplace stress. Drinking may help some employees relax and boost their mood. As a result, a glass of wine or beer can help calm employees dealing with stressful workdays or nerve-wracking situations.
• Boost employees’ creative problem-solving abilities. An experiment reported in Harvard Business Review showed that when 20 men drank enough vodka cranberry cocktails to push their blood alcohol levels close to the legal limit of 0.08, they solved word puzzles better and faster than a sober control group. Researchers suggested that mild intoxication might help with certain creative tasks, though it’s far from a universal solution.
• Improve recruitment and retention. Having alcohol at work could be a unique perk that may help your company stand out to promising candidates or help you hold on to top talent.

Cons of Alcohol at Work: Attorney Weighs In

If you’re feeling skeptical about alcohol at work, you’re not alone. HR teams need to consider whether the social benefits are worth the potential legal risks. From a compliance standpoint, alcohol at work can create serious risks.

Employment attorney Jon Hyman put it best: “The idea of an office open bar makes my compliance skin crawl.” He outlined several concerns about the legal risks of alcohol at work, including:

• Alcohol loosens inhibitions, which can lead to inappropriate conduct. Studies show that alcohol and workplace harassment are linked more often than many organizations realize. For example, a study by Cornell University found that when the consumption of alcohol at work increases, so does the risk of harassment of women by male co-workers. And as you probably know, sexual harassment payouts can be expensive.
• Allowing employees to drink alcohol at work may exclude some workers, such as those with a history of addiction issues, those whose religious beliefs prohibit the use of alcohol or those who must abstain for other health issues. It also could lead to peer pressure situations or uncomfortable conversations about why someone isn’t drinking.
• It could compromise the sobriety of recovering alcoholics. Making alcohol readily available at work can make it extremely hard for those with an alcohol addiction to stay sober.
• Liability issues that come with alcohol use. Do the company’s insurance policies contain alcohol-related exclusions? How will employees get home after consuming alcohol at work? Will you have designated drivers or foot the bill for ride sharing? Who monitors consumption to ensure folks aren’t overindulging?

Create a Clear Alcohol Policy

A well-crafted alcohol policy is a foundational risk management tool that helps protect your organization and your employees.

By clearly setting expectations, HR can reduce the likelihood of inappropriate behavior, support inclusivity and demonstrate a proactive approach to workplace safety.

To be effective, your HR alcohol policy should:

• Clearly define when and where alcohol use is permitted. Specify if alcohol at work is allowed at all, and if so, outline appropriate settings, such as off-site celebrations or networking events. Clarify whether limits (e.g., drink maximums) apply and who is responsible for monitoring consumption.
• Describe expectations for behavior during company-sponsored events. Reinforce that professional conduct standards apply, even in social settings. Emphasize that alcohol is never an excuse for misconduct, including harassment or discriminatory behavior.
• Communicate the consequences for violating the policy. Outline the disciplinary actions for policy breaches, making it clear that accountability applies to all employees, including leadership.
• Include accommodations for employees who abstain. Ensure events are inclusive by offering non-alcoholic options and avoiding pressure to drink. Recognize medical, religious, and personal reasons for abstaining and create a respectful environment for all attendees.
• Align with applicable state laws and consult legal counsel. Alcohol regulations vary by state or local laws. Review your policy with legal counsel to ensure compliance and to mitigate liability in the event of an incident.
• Review the policy annually and after incidents. Regular reviews help ensure your alcohol policy stays aligned with evolving workplace culture, legal requirements, and organizational values. Reassess after events where alcohol at work led to issues or concerns.

You’ll also need to provide training to managers on how to apply the policy in real-world scenarios and remind employees of the company drinking policy before any event where alcohol may be served.

Taking these steps builds a culture of respect and safety – without sacrificing team connection.

Recognizing and Responding to Alcoholism at Work

How do you deal with employees suspected of drinking alcohol at work when they shouldn’t be? Or arriving at work with debilitating hangovers?

Addressing alcohol issues in the workplace can seem daunting. Falsely accusing an employee can lead to major trouble, so it’s important to balance the delicacy of the situation with prioritizing the health and safety of all employees. 

Warning Signs

Common warning signs of alcohol abuse from employees include:

• Frequent absences or tardiness: Employees who are struggling with alcohol abuse may frequently miss work or show up late.
• Poor job performance: They may have decreased productivity, make mistakes or have difficulty concentrating.
• Changes in behavior: They may exhibit mood swings, become irritable or defensive or have difficulty controlling their emotions.
• Physical signs: They may have slurred speech, bloodshot eyes or an unsteady gait.

HR’s Next Steps

Noticing these warning signs is one thing, but many employers struggle with where to go from there. Here are the initial steps to take:

• Keep a factual record of what you’ve observed and avoid jumping to conclusions.
• Reference your alcohol and substance abuse policy for consistency.
• Involve a manager or legal team before taking action.
• Avoid direct confrontation; frame the conversation around support and performance.

“Coming from a place of empathy and care is more productive than a disciplinary type meeting,” advises William Stonehouse III, president and co-founder of Crawford Thomas Recruiting. It’s important to approach the situation carefully and with compassion instead of accusations. 

Depending on the situation and its severity, you may want to refer the employee to resources to find help and guidance, such as:

• Employee assistance programs (EAPs): If your company offers an EAP, you may want to refer the employee to counseling to get additional support.
• Referral to a healthcare provider: If the situation is more severe, the best thing HR can do is refer the employee out to a trained professional. Employers can encourage employees to seek help from a healthcare provider, such as a primary care physician or a mental health professional.
• Referral to a support group: Local support groups such as Alcoholics Anonymous or SMART Recovery can help employees find a like-minded community to get peer support.

What the ADA and FMLA Say About Alcoholism

Alcohol use disorders can raise complex legal considerations under the Americans with Disabilities Act (ADA) and the Family and Medical Leave Act (FMLA).

It’s important for HR to recognize when these laws may apply and what obligations they create for employers. Understanding the intersection between alcohol-related conditions and employment law helps reduce legal risk and ensures your policies support compliance and fairness. Here’s what to keep in mind.

1. Is alcoholism a protected disability under the ADA?

The ADA may apply to people with alcoholism, but it does not require employers to excuse performance issues or misconduct – even if alcoholism causes those issues.

At the same time, the general ADA duty to accommodate applies in cases where alcoholism qualifies as a disability. That means you need to be ready to evaluate whether an effective accommodation can be made. For help, check out these five tips for accommodating employees with alcohol use disorders.

2. Is alcoholism considered a serious health condition under the FMLA?

Substance abuse, including alcoholism, can qualify as a serious health condition under the FMLA if an eligible employee seeks treatment involving “inpatient care” or “continuing treatment” by a healthcare provider.

The FMLA provides limited leave protections to individuals who are seeking treatment for alcohol addiction. Specifically, FMLA leave may be taken for substance abuse treatment provided by a health care provider or by a provider of health care services upon referral by a health care provider.

However, absences due to an employee’s substance use do not qualify for FMLA leave, according to the DOL.

Looking Ahead: Rethinking Alcohol’s Role at Work

As drinking norms shift and employee expectations evolve, HR professionals may be able to reset how alcohol at work fits into the company culture. Whether you’re rethinking an open-bar tradition or writing your first policy, it’s not necessarily about banning alcohol altogether; it’s about handling it wisely.

Support employees in recovery and create environments where people don’t feel excluded. By taking these steps, you help protect employees — and the company.

The bottom line on alcohol at work: Clear policies, honest conversations, and a respectful culture go a long way toward creating a healthier, more inclusive workplace.