Does workers’ comp cover employees injured at company-sponsored events?

Company-sponsored social and recreational events have become common in today’s workplace. They can be a great way to recognize achievements, celebrate holidays, strengthen bonds, build moral or just let off some steam. But what happens if an employee is injured while attending a company-sponsored event? Is the injury covered under their employer’s workers’ compensation policy? Well, that depends.

Workers’ compensation insurance generally covers injuries that arise out of and in the course and scope of employment. However, depending on the circumstances, injuries sustained by employees attending company-sponsored social or recreational activities may be covered by workers’ compensation. This determination can be both state- and fact-specific, with each state applying its own interpretation of whether injuries “arise out of and in the course of employment” when they occur at a company-sponsored social or recreational event.

In Florida, for example, “recreational or social activities are not compensable unless such recreational or social activities are an expressly required incident of employment and produce a substantial direct benefit to the employer beyond improvement in employee health and morale that is common to all kinds of recreation and social life.” Under this standard, issues of compensability often turn on whether the employee’s attendance at the company-sponsored event was truly voluntary.

An injury sustained at a company-sponsored event will likely be deemed employment-related (and covered by workers’ compensation) if attendance is mandatory. Attendance at a “voluntary” event may also be considered mandatory if employees feel forced to attend. A company-sponsored event is not truly voluntary if attendees are rewarded or absentees are punished.

It should also be noted that the employer need not actually “host” the event for liability to be imposed.  For example, if employees are required to attend an event sponsored by a customer, they are likely covered by workers’ compensation because the employer made attendance mandatory hoping to benefit from the goodwill generated by the staff toward the customer.

Generally, employer-sponsored picnics, sports events, recreational leagues, and company retreats are meant to foster team building, inspire loyalty, and boost employee morale. Such events are usually well-received by employees and may serve as a reward for hard work.  However, employers would be wise to consider the potential risks involved when planning these events. To minimize exposure, employers should:

• make clear to employees that attendance and participation are not mandatory; and
• when possible, plan events away from the company premises and on weekends to emphasize that such events are social and not work-related.

When these and other appropriate risk-management measures are taken, employers can maximize the benefits of company-sponsored while minimizing the risk of compensable workers’ compensation claims. The Human Equation prepares all risk management and insurance content with the professional guidance of Setnor Byer Insurance & Risk.