Selection Sunday, the brackets, the games, the upsets, the excitement…that’s March Madness!

Oh – and then there’s the lost productivity and illegal gambling at work, but who’s counting? What is the real cost to employers in lost productivity during this, the most wonderful time of the year, and what are the real risks to them and their workers on the inevitable illegal gambling, a/k/a “the brackets?”

Estimates range widely, but the outplacement firm Challenger, Gray & Christmas last year predicted that employers will pay approximately $175 million to workers who spend time watching basketball, and not working, in just the first two full days of the tournament. Users surveyed spent almost 93 minutes a day streaming video during the later rounds.

Employers must set the ground rules, but this is one area I’ll tell you to be a little flexible. Even otherwise productive workers will take time out to watch the games, and technology has made it easier than ever. If you want to stop the viewing entirely, merely telling employees they can’t use the company computer to watch the games isn’t going to cut it. The NCAA website provides viewers the opportunity to “Watch Every Game Live” using iPhones, iPod Touches, IPads, select Android devices and the computer (note that the computer is last on the list -- it’s so yesterday!).

With that said, be careful what you wish for. Business owners must consider the camaraderie that is created by the madness against the downside of the time wasted. No need for a diversity class – March Madness is the ultimate opportunity for inclusion and finding similarities since virtually every race, gender, national origin and age partake in the action. Better than a ropes course, March Madness could be your ticket to employees forging new workplace relationships and getting to know each other better.

Of course, tell your managers to set the standards by making sure that work still gets done, customers still get the attention they need and productivity doesn’t have a noticeable drop. Remember to be consistent. You can’t discipline that annoying employee you’ve been meaning to get rid of and not the top salesperson who is doing the same thing. Regardless, communicate the expectations.

Now – for the gambling. This is tougher. A survey conducted this year shows about one-third of those betting plan to bet more on March Madness than the Super Bowl. The stakes are high, too, with some employees reporting losing more than $200 in the brackets.

But it’s all in good fun so, what’s the big deal? Well Virginia law appears to make this conduct criminal, and if you get stiffed in the pool you have no recourse since the entire transaction is void by law. In addition, in theory you could be prosecuted.

The NCAA opposes any gambling on college sports. The NCAA’s position on office pools is as follows:

“Q: Does the NCAA really oppose the harmless small-dollar bracket office pool for the Men’s Final Four?

“Yes! Office pools of this nature are illegal in most states. The NCAA is aware of pools involving $100,000 or more in revenue. Worse yet, the NCAA has learned these types of pools are often the entry point for youth to begin gambling. Fans should enjoy following the tournament and filling out a bracket just for the fun of it, not on the amount of money they could possibly win.”

I am not aware of a single person being prosecuted for illegal gambling when it comes to the NCAA office pool (if you are – tell us in the comments below). So maybe this isn’t an issue for employees, but it is for employers. Business owners can be equally culpable if they allow this conduct to take place in the workplace, especially if they are considered a gambling operator which is a Class 6 felony. You have to ask whether it is worth it.

My suggestion: if you are a business owner, openly prohibit the gambling. Communicate this expectation widely and stop it if you see it. The conduct undoubtedly violates your code of conduct. Instead, create other opportunities for employees to enjoy this time of the year, for example:

  • Don’t entirely discourage the viewing – allow it within reason
  • Let employees wear their favorite team shirt on their team’s game day
  • Sponsor a chili cook-off by letting employees select their favorite Sweet 16 team. Let the “teams” make a chili and see who wins
  • For the Final Four – hang a big banner of all four teams and have employees sign the banner they support and for the winning team – an ice cream party (this is a little like gambling but of true nominal value)
  • Do a company bracket pool and give the winner a day off (ok – this is sort of like gambling too but I’d argue it has no “real” value - it is merely time off)

In the end, being a little flexible might just be good for business – assuming employees don’t spend all day enjoying the games.

Karen Michael is an attorney specializing in practical work law solutions and provides advice, training and investigations to organizations in the public and private sector. The information in this article is offered as general information and is not intended to serve as legal advice and should not be relied upon as legal advice, nor does it form any client/attorney relationship.

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