Why you've got to have an employee handbook

It's a way to protect your business and your workers

Many employers either do not have an employee handbook or view the one they do have as nothing more than a boring, lengthy document that they give to new employees at the outset of employment. Many business owners also make the mistake of believing that an employee handbook is a one-size-fits-all document that can easily be found on the internet for little to no cost.

On the contrary, a well-written specific employee handbook is an essential tool that can help employers avoid or mitigate future litigation risk and other liability. A comprehensive employee handbook drafted by a competent labor and employment attorney is one of the most cost-effective ways business owners can help avoid workplace conflict and mitigate future litigation risk. However, it is not enough to merely implement a handbook and leave it alone for the foreseeable future. With federal and state law constantly changing, it is crucial that employers also continually update their employee handbooks to ensure they remain compliant with applicable laws.

A properly-drafted employee handbook can provide several benefits to employers. First, a good handbook will clearly communicate workplace rules of conduct and performance expectations to employees, which will help avoid workplace conflicts that arise out of employee uncertainty about performance expectations.

Well-drafted policies will also help prevent employee claims of ignorance about acceptable and unacceptable behavior in the workplace, and will help managers be more proactive in addressing employee misconduct. However, employer preferences on these rules and standards vary, which is one reason why your handbook should be specifically tailored to your business. It is critical that your policies reflect your actual practices, and that such policies are evenly applied to all employees.

Another key benefit of a proper handbook is the protection employers gain in employee disputes from having proper policies in place. Any employer who has been through a discrimination or harassment lawsuit knows that the first question that is often asked is what policies the employer has in place related to the alleged unlawful conduct. Employers with strong anti-discrimination and anti-harassment policies begin these inquiries on strong footing. Additionally, having proper policies in place bolsters the employer’s overall credibility with judges, juries, and government agencies.

Furthermore, proper reporting and open door policies can protect employers against liability for damages allegedly suffered by plaintiffs who claim they were subjected to harassment, despite having never reported harassment during their employment. Handbooks that feature strong at-will policies and acknowledgments can also combat against employee claims of a guarantee of employment for a specific period of time.  A proper acknowledgement can also protect against future claims that an employee’s terms or conditions of employment were verbally altered by a person in a position of power within the company. These claims can be costly and time consuming for employers who do not have proper policies in place.

It is understandably tempting for an employer to search for an inexpensive or free handbook on the internet. However, these handbooks are more trouble than they are worth, and each employer should have a custom, specific handbook that is tailored to that employer’s specific business for both practical and legal reasons. Practically speaking, every employer should ensure that its handbook reflects its unique values and practices. From a legal perspective, it is important for the handbook to be specific to the employer’s particular industry, to ensure that any applicable regulations or policy requirements specific to that industry are addressed in the handbook.

Additionally, there are several labor and employment laws that are only applicable to employers of a certain size. If such laws are applicable to a certain employer, they should be discussed in that employer’s handbook. If not, they most likely should not be addressed, unless the employer wants to provide more rights to its employees than it is required to.  Finally, employment laws vary from state to state, and many states have important, sometimes complex laws that must be addressed in employee handbooks. For these reasons, it is a good idea to have a competent labor and employment attorney either draft a new handbook for you, or review your existing handbook to ensure legal compliance.

After your handbook is finalized and implemented, it is not enough to merely hand it out to new employees for the foreseeable future without giving it a second thought. Federal and state lawmakers often change laws that impact handbook policies, and it is not uncommon for a policy that had been permissible for a long time to suddenly be illegal as a result of changing laws.

In the past year alone, the federal government and numerous state governments have made multiple important changes to longstanding laws that affect employee handbook policies. It is imperative that employers ensure their handbooks are updated at least annually, or as new developments occur, to ensure their handbooks will continue to be effective and compliant going forward.

In sum, a specific and properly-drafted employee handbook is one of the most cost effective measures employers can take to help mitigate future headaches. While there will be a cost associated with implementing a proper handbook, that cost will pale in comparison to the cost of an employment dispute that could have been avoided by implementing a proper handbook policy, or updating an existing policy to ensure continued compliance. On this topic, an ounce of prevention is truly worth a pound of cure.        

Categories: Management & Leadership