• Be sensitive to religious differences in the theme, title, and decorations of the party. Not only does it help to prevent discrimination claims, it helps everyone feel included.

• Parties at the workplace (or at your home) will more than likely make you the responsible party if there is any type of incident, so have the party at a third-party location that has its own liquor license and crew (which reduces the risk). It’s best not to make employees work at the party (set-up, clean-up, etc.) If you do have non-exempt employees work at the party, you’ll need to pay them for their time (including over-time pay if appropriate). 
  
  
•  Emphasize that attendance is voluntary. If the party is mandatory, you could be liable for wages, third-party claims, and workers’ compensation. If employees are even “expected” to attend, it will likely be deemed a mandatory function. Pay attention to employee communications (e.g. “We expect to see everyone at the party on Saturday”) and eliminate the expectation of compensation for attendance.
  
  
• Allow employees to bring guests, as their presence usually encourages employees to be on their best behavior. However, because employees often act differently out of the traditional work environment, it’s a good idea to clearly communicate expectations of behavior for them as well as their guests. Skip the mistletoe – this is only asking for trouble. 
  
  
• Provide alternative transportation (taxis, vouchers, reimbursement) and ban the use of company vehicles and rental cars. 
   
• Ensure that plenty of non-alcoholic beverages are available and have guests buy their own drinks from paid bartenders who can monitor their consumption (and refuse to serve them if they’re underage or have had too much to drink). Consider having only beer and wine available and order plenty of food to help slow the absorption of alcohol.
   
• Promptly deal with inappropriate behavior (excessive drinking, insubordination, employee disagreements, inappropriate discussions, reports of unwanted sexual advances).
   
• If you’re going to give bonuses, make them discretionary. Bonuses that are given based on work performance or hours worked might have to be included when determining the overtime rate for calculating overtime pay.
   
• Consider eliminating the gift exchange. The cost to participate is prohibitive to some, expensive or personal gifts can make the recipient feel awkward, and gag gifts can be offensive.   

All of this may sound like it takes the fun out of the party; however, celebrating wisely can prevent the headaches that often occur when everyone goes back to work. On the other hand, you might consider volunteering at a charitable organization instead of having a party. It helps to build camaraderie and provides a way to celebrate the season that virtually eliminates the risk of liability.