March Madness and its Impact on Employers
With the NCAA Men’s Basketball Tournament set to begin next week, employees everywhere will be filling out their tournament brackets. As “March Madness” sweeps the nation, employers face special challenges — particularly in maintaining a productive and efficient workforce at a time when distractions are abundant. In addition, employers should ensure that any tournament pools organized at the workplace are operated in accordance with the law.
Impact on Productivity
There can be little debate that March Madness itself as well as office tournament pools impact the productivity of employees and the company as a whole. Even before the tournament begins, employees will spend time strategizing with co-workers about which one of the 68 teams has what it takes to win it all, which number one seed will be the first to be eliminated, and who will be this year’s “Cinderella team.” Then, with streaming webcasts of every game in every round of the tournament now available on various websites, employees have the ability to watch the tournament during working hours. According to a report by Challenger, Gray & Christmas, Inc. an outplacement company, time spent viewing tournament games online during the work day may reach 8.4 million hours this year which, when multiplied by “the average hourly earnings … among private-sector workers [makes] the financial impact exceed $192 million.” Add in the time spent around the water cooler discussing first-round upsets and buzzer-beater victories, the time spent calculating points earned in the pool, and the time spent circulating or posting updates of standings in the office pool, and it is clear that employers face a significant challenge courtesy of the NCAA.
Legality of Office Pools
While the law of individual states vary, unlicensed gambling, such as “Super Bowl Squares” or “March Madness” pools, may be illegal even when the monetary wager is nominal. For example, New Jersey’s state gambling statute, provides that “[a]ll wagers, bets or stakes made to depend upon any race or game, or upon any gaming by lot or chance, or upon any lot, chance, casualty or unknown or contingent event, shall be unlawful.” Despite this broad prohibition, however, New Jersey gambling laws provide an exception that can be interpreted to allow forms of gambling in which no profit is taken beyond personal winnings. Accordingly, when no player or other person, like the organizer or host of the pool (the “house”), takes a profit or earns anything more than any other participant in the pool, and everyone has the same chance at winning, office pools are generally lawful.
So, what is an employer to do? According to a 2010 Society for Human Resource Management study, 67% of companies either allowed or were not concerned with office pools, while 33% banned them. In addition, 55% of employers believed that office pools improved employee morale. Whether to permit an office pool or ban it is ultimately a business decision with little legal impact.
Insofar as workforce productivity is concerned, whether an office pool exists or not, employers will struggle to keep college basketball fans focused entirely on work during the NCAA Men’s Basketball Tournament. To help maintain productivity, employers should consider a creative approach, such as offering non-wage incentives to employees who demonstrate certain levels of productivity on each workday during which there is tournament play. For example, they can award employees with a “dress down day” or tickets to a local attraction.
The good news for employers — once March Madness is over, there are ten months left until the Superbowl.