You are having one this year, right?

Business owners and people who advise them agree that holiday parties are important rituals in the life of a company, making employees, and also clients and vendors, feel appreciated, recognized and part of a community.

It's especially true for employees.

Alfred Portale, owner and chef of New York's upscale Gotham Bar and Grill, said of his holiday party, "It's an extension of my philosophy about our employees, that they're our greatest assets and they need to be taken care of."

Portale's party actually is after the busy holiday season, and is held on Super Bowl Sunday. He closes the restaurant to the public and brings in a chef and waiters from other restaurants so his employees and their families can just enjoy themselves.

Human resources consultants say holiday parties can go a long way toward building morale, good will and teamwork.

"When a company's culture is strong in trust, pride, respect and depth of relationships, and people know each other, (then) when times get tough, they pull together instead of pulling apart," said Leslie Yerkes, president of Catalyst Consulting Group in Cleveland. She explained that "one of the ways to build a robust culture is through rituals" like holiday parties.

Still, given the uncertain economy, some owners might be questioning whether it makes sense to have a party this year, especially if they're suddenly paying thousands of dollars extra for energy bills or other rising expenses. The answer is yes. A party doesn't have to be expensive.

"People are scaling back, obviously, because they're thinking about costs and expenses. I don't think they're giving up on these (parties), and I don't think they should," said Mallary Tytel, president of Healthy Workplaces in Bolton, Conn.

Yerkes said, "It doesn't have to be big and flashy. Ask the people who you're inviting - ask them what would be meaningful."

Although business has been picking up at Chen PR Inc., a Waltham, Mass., public relations firm, co-founder Brenda Nashawaty said employees asked that money for a big party be given to charity. While in the past the company rented a public aquarium for their party, this year it will be a potluck affair at Chen's offices, with families, vendors and clients also invited.

There was never a thought to canceling the party outright, though. Chen is having a party because "we're grateful for what we have and we like each other," Nashawaty said.

The smallest of companies - where, for example, there are only a handful of employees - might find it hard to put a party together. One solution is to join forces with other companies.

Organic Works Marketing, a New York-based public relations firm, recently moved into a new office building. Owner Mara Engel said her company is holding a joint party with other companies located on the same floor.

"We just thought it would be great to have more of a community feel," Engel said. "It's an interesting way to meet new people and create a networking environment."

The party will be at the building, and employees, clients, customers and friends are all invited.

While you should have some kind of party, there are a few caveats to keep in mind.

Jerry Hunter, an attorney with the law firm Bryan Cave in St. Louis, noted that a business can be liable if something goes wrong at a holiday party, whether it's attended by employees, customers, vendors or any other guests.

For example, he said, an owner needs to be careful about alcohol being served, because the company could be held liable if there is an alcohol-related accident. He suggested that parties where alcohol is served be held only at establishments with a liquor license and professional bartenders - although in some states that might not prevent a business from having to pay damages.

Hunter said owners might want to consider providing free transportation in case someone has too much to drink and is unable to drive.

And, he said, "every small business should check their insurance policy to be sure this kind of function is covered."

He also said owners need to be sure that employees are aware of the company policy on sexual harassment and that any harassing acts at a party won't be tolerated.

One other point to be aware of - employees should know that attendance at a company party is voluntary, Hunter said. If you require them to show up, you might find yourself with a workers compensation claim if someone gets hurt.

Copyright 2004 Associated Press