Bob Adolfson says he’ll always remember a party he catered in the early 1990s in Seattle. It was an end-of-the-year bash for a company with 12,000 employees held at the Washington State Convention & Trade Center.

To make the large venue feel less cavernous, the caterers hung curtains across rooms, improving the ambience and delineating spaces, says Adolfson, who now is co-owner of the Glover Mansion in Spokane. After a night of dining and drinking, though, that drapery served another purpose.

“The next morning, security (workers) found no less than a dozen people who had found ways to fall asleep inside the drapes,” Adolfson recalls. “And for some reason, they felt they needed to let the company know these people were there and who they were.”

An annual ritual for many businesses, holiday parties are both anticipated and dreaded by employees. Organizers say the events are a way to thank staffers for a year’s worth of hard work and to celebrate the holidays with colleagues who sometimes are as close as family. But expectations for parties vary from business to business, and the rules have changed over the years.

Monica Brandner, an etiquette and image coach in Spokane who owns Image by m. brandner, says one of the biggest mistakes employees make at holiday parties is forgetting they’re still in a business setting.

“They will try to bring the rules of social etiquette, which are based on friendship and are more informal, into a business setting,” Brandner says. “It doesn’t mean that our business relationships can’t become intimate and personal. You just have to be careful about crossing the line.”

One of the most common pitfalls is when workers dress inappropriately, she says.

“If you walk into the room at a holiday party and you look like you’re going to a club … you’re going to lose your authority in the workplace,” Brandner says. “Look gorgeous and great, but it’s not appropriate to bring sexuality into the workplace.”

She says whether people like it or not, their outward appearances and actions are always being judged. Even simple etiquette rules, such as thanking the event organizers and host—both in person at the end of the event and with a handwritten note a few days later—can’t be overemphasized, Brandner says.

“In the current economy, for some companies to hold a party right now, it’s a great financial burden on their part,” she says. “They may be cutting back on something else to give to their employees instead.”

Of course, Brandner warns against drinking too much at the events. While the image that comes to mind might be of an inebriated colleague dancing atop a table, Brandner says losing one’s inhibitions can have more subtle outcomes. A conversation might turn into a political argument. Negative feelings about the company might be spewed and overheard.

And, Brandner says, limiting alcohol isn’t just something more junior employees should be warned about.

“The people in leadership, if they drink too much, might act immature,” she says. “Whether they know it or not, they’re losing respect from the people they’re leading.”