The more you consider limiting the actions of workers while they're off the clock, the closer you step toward a lawsuit.
More than half the states have laws protecting workers from job discrimination based on what they do away from the workplace. Even some municipalities have passed similar statutes.
The most widespread state statutes protect the rights of smokers. But a few states have broader laws preventing you from taking action against workers for their off-duty use of other legal products, such as alcohol, and taking part in legal activities, such as sky diving. These laws, mostly passed in the late 1980s and early 1990s, generally would bar you from refusing to hire or from firing protected workers.
The issue has cooled off in the state legislatures, but it isn't going away, says Lewis Maltby, president of the National Workrights Institute in Princeton, N.J.
Insurance costs can be affected
While employers typically can't prevent workers from smoking or drinking while off duty, they can charge smokers higher health insurance premiums. With insurance costs soaring again, more employers are setting premiums based on workers' riskier activities. As use of this tactic grows, expect more legal challenges.
Your safest bet: Know the laws that apply to your locality and base your policies on sound actuarial data.
For example, charge workers more for health coverage only if their behavior costs you more for insurance. Also, make the cost that you pass along proportionate, not a punishment.
"There's no reason why the employer should have to absorb the incremental risk" of a worker's off-duty behavior, Maltby says. "As long as the additional cost is actuarially sound, there's nothing wrong with it."
The problem is that most employers haven't crunched the numbers or figured out what passes for research on extra costs.
Don't count on the courts
What's more, courts can be difficult to predict on this issue and case law is sparse.
Even if you can legally fire an employee for an off-duty activity, you may still end up paying.
Maltby cites the case of an Indiana worker fired for social drinking.
The employer called it willful misconduct, but the worker still won unemployment benefits.
In another case, two Wal-Mart employees in New York sued after they were fired for dating in violation of a company policy. Although the state has a fairly broad statute that protects workers from job discrimination based on their "recreational" pursuits, the court decided the law intended to cover things like skiing and scuba diving, not dating. The couple lost.
Bottom line: Put limits only on work qualifications. Ignore behavior that isn't related.