The NCAA Men’s Basketball Tournament is upon us and employers are again faced with the question of whether to allow workers to take part in bracket pools.

These contests allow participants to pick the winners of each game, earning points along the way for each correct guess. Often, the organizers of the pool charge and entry fee and distribute the funds to the top finishers. What should employers think about workers taking part in these contests at the office?

One side: Bracket contests are a form of gambling, which may violate the law and is therefore unacceptable in the workplace! Moreover, the time spent on these activities is a drain on productivity!

The other side: Bracket contests are harmless fun and letting employers watch games can boost workplace morale! And claims of lost productivity are overstated!

About 40 million Americans will fill out brackets this year, according to the American Gaming Association. Outplacement firm Challenger, Gray & Christmas said that translates to about 23.7 million workers, who will collectively represent $5 billion in lost wages due to lack of productivity. And that doesn’t even count the fans who choose not to take part in bracket pools but still watch or follow games while at the office.

Of course, these figures always come with the usual caveat that employees may not necessarily have otherwise used that time productively. In the absence of the NCAA tournament, workers could easily distract themselves by hanging out on Facebook, watching YouTube clips, or checking out TMZ.com.

Team Camaraderie

Challenger, Gray & Christmas said the benefits of allowing bracket pools and game watching outweigh the costs.

“The tournament is a perfect opportunity for colleagues to bond in the workplace,” the firm said in a press release. “Any attempt to keep workers from the games would most likely result in real damage to employee morale, loyalty and engagement that would far outweigh any short-term benefit to productivity. Employers should embrace March Madness and seek ways to use it as a tool to foster camaraderie.”

There is no consensus in the human resource community on how to handle bracket contests. WalletHub reported that 81 percent of HR departments don’t have policies regarding employee participation. Indeed, decisions about bracket challenges are often left to individual managers, who know best whether employee participation in bracket pools would be harmful or helpful.

“The result of the productivity-morale equation is employer-specific and depends on the nature of your workplace and your business goals,” writes the Mintz Levin law firm. “For example, we can certainly see how management at an accounting firm may grow uneasy at a lack of focus from its employees as their clients’ tax filing deadline nears. At the same time, we can also see how management at this same firm . . . may want to convert this into an employee appreciation moment, gather its employees in a conference room for an extended lunch and game-viewing session and take a breather from their overwhelming workloads.”

Legal or Not?

Are there legal concerns for companies? After all, isn’t gambling on sports illegal? Mintz Levin said that technically, bracket pools could violate federal laws that ban sports gambling across state lines. Participation in these pools could also run afoul of the Professional and Amateur Sports Protection Act. There are, however, exceptions at the state level for “recreational” or “social” gambling, so it’s important for companies to understand the laws where they operate.

Mintz Levin offers some guidelines for how employers can allow bracket challenges without running afoul of the law. The firm suggests preventing employees from using company computers or printers, and asking that organizers limit entry fees to a reasonable sum. (Or, alternatively, charging no entry fee but offering a prize to the winner.) Mintz Levin also said companies should work to ensure that no employee feels pressured to take part.

Enforcement of sports gambling laws, particularly against workers participating in a casual contest, is almost non-existent. Thus, the major concern for companies may be striking the balance between productivity and workplace morale.

OfficeTeam, a national staffing service, said workers will spend about 25 minutes per day during the tournament taking part in “some sort of sports-related activity.” The firm said that in general, companies should trust employees to enjoy the tournament and still get work done.

“Good workers still get their projects done, even if they take occasional breaks,” said Brandi Britton, a district president for OfficeTeam, in a press release.

Britton said it’s best to advise workers to follow company guidelines for proper employee breaks and computer use, as well as rules regarding workplace attire.  

One certainty is that enthusiasm for the NCAA Men’s Basketball tournament isn’t subsiding anytime soon. Companies that strike the right balance between fun and productivity can usually make it through March Madness unscathed.