So you’ve decided to organize a fun activity for employees to participate in. Maybe you’ll set up a cornhole tournament or friendly softball game.
Everyone can have a little fun and go home happy. What could possibly go wrong?
The answer: Plenty.
An employee might suffer the dreaded cornhole injury to a wrist or ankle. A slip-and-fall injury is certainly not out of the question. And if alcohol is involved, a whole new can of worms is cracked wide open. What if an employee has too much to drink and is injured while driving home?
If an employee gets hurt at an event like this, an important question arises: Does workers’ compensation cover the injury?
Here’s what you need to know to answer that question – and how to limit workers’ compensation liability when employees get hurt at company-related events or activities.
Workers’ comp: A state-law animal
Though workers’ compensation is a creature of state law (discounting federal workers), a generally applicable rule is this: An employee injury is covered by workers’ compensation if the injury occurred in the course and scope of employment.
Sometimes, it is easy to see that an injury occurred in the course and scope of employment. A box loader who clocks in at 8 a.m. and gets hurt loading a box an hour later clearly has been injured in the course and scope of employment.
But in cases involving company events, the call can be much more difficult to make.
Here are some relevant questions to ask when determining whether a particular employee injury at a company event is truly work-related — and how to limit potential liability.
An overriding consideration: What was the employer’s overall level of involvement with the event, and did the event primarily benefit it?
Relevant questions (and answers)
Here are five more specific questions to ask.
Question 1: Did the employer sponsor the event?
If the employer financially supported the event, such as by purchasing uniforms for the softball game and renting the field where the game was played, a finding that a resulting injury was work-related is more likely. To limit potential workers’ compensation liability, employers can distance themselves from the event by limiting their financial support for it – or eliminating such financial support altogether.
Question 2: Was attendance required?
This is a big one. If an employer requires employees to attend a company event, the chances are high that an injury occurring there will be deemed to have been suffered in the course and scope of employment — and thus eligible for workers’ compensation coverage. To prevent this factor from leaning toward coverage, employers should make it very clear – preferably in writing – that employee attendance at the event is strictly voluntary.
Question 3: Did the activity further work skills?
When organizing company events, pay careful attention to whether event activities further employees’ work skills. If they do, a finding of workers’ compensation coverage is more likely. Take the example of the softball game. That’s probably not an activity that furthers employees’ work skills. But an activity that veers more in the direction of training – like a happy hour featuring a talk by a sales guru for sales employees — will be more likely to be deemed work-related. Ask this important question: Does the event involve activities that relate to employees’ job skills?
Question 4: What if they were driving?
Difficult questions arise if an employee is injured while driving to or from a company event, particularly if alcohol may have been involved. These are extremely fact-specific cases, and there is no one-size-fits-all answer. But let’s look at one real-life example from Pennsylvania.
Following his last sales appointment, a salesman drove to an employer-sponsored event at a pub. He left the event and was injured in a motor vehicle accident. The state’s highest court adopted what it called the “traveling employee doctrine,” under which “a traveling employee must be considered in the course of his or her employment during the entirety of work-related travel unless the employee abandons his or her employment.” It said that in this case, the employee did not abandon his employment by going to the pub. The presumption was that he was in the course of his employment at the time of the accident, it ruled.
Employers must remember too that aside from workers’ compensation issues, they may be liable in negligence for injuries sustained by a worker who drinks too much at a happy hour. For example, Oregon’s highest court ruled that an employer could be liable for serious injuries sustained in a motor vehicle accident by an employee who allegedly was encouraged to drink excessively after work with a supervisor. The same logic would apply to a case involving employer-coerced – and perhaps even employer-enabled — excessive alcohol consumption at any company event.
Question 5: Was there a waiver?
Employee waivers of workers’ compensation coverage are mostly ineffective because they are banned. In Pennsylvania, for example, state law specifically bars such waivers.
Be careful here, though: Waiving liability for workers’ compensation coverage is not the same as waiving liability for other claims, such as claims for negligence – and is also very different from having employees acknowledge that a company event is an outside, non-work activity.
Employers may have employees sign the latter type of waiver and acknowledgment before participating in such events. These waivers, such as this one, should make it very clear that participation in the event is strictly voluntary and that the employee understands it to be separate and apart from any employment duties. Although such a waiver is not explicitly a waiver of workers’ compensation benefits, it can nonetheless help avoid workers’ compensation liability by tending to show that the event occurred outside the course of employment.
To wrap up
Remember that the question of whether a particular injury is work-related is very fact-specific. At the same time, there are steps employers can take to reduce the likelihood that an injury sustained in connection with a company event is not covered by workers’ compensation insurance.