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The Rough Notes Company Inc.



February 27
13:17 2017

The Innovative Workplace

 Help them understand the need for this vital communication tool

 Why are employee handbooks important? Does each of your clients really need one? Does your agency need one? We think so. Providing your clients the ability to create legally compliant employee handbooks gives them the additional assurance that, as their trusted advisor, you are looking out for the best interests of their businesses.

Here are five reasons why a well-drafted employee handbook is an essential management tool for any business:

It provides important cues to employees about the company culture and what the organization values.

It gives employees important information about how the company will handle their lifecycle events.

It provides the roadmap for company expectations relating to employee performance and behavior.

It assists company leaders in providing uniform and consistent application of company policies.

It plays a critical role in providing employees internal avenues to resolve issues that help to prevent claims of improper employer conduct or employee lawsuits. In other words, it can be an important risk-mitigation tool.

Although employee handbooks are not required by law, every organization needs to communicate important company and people operations-related information to its employees. Handbooks can be a useful tool to consolidate that information in one place that is easily accessible to all employees.

Factors that affect an organization’s need for a written employee handbook include:

  • The number of employees
  • The number of employing units
  • The state(s) in which the organization operates
  • The industry
  • Whether the organization is a government contractor
  • Whether the organization is unionized

As a general rule, if an organization’s employment policies, procedures, programs, and methods are important and contribute to the organization’s success, they should be in writing. Once in writing, they should be consistently enforced. To be consistently enforced, they must be communicated. To be communicated, they should be disseminated in a format easily accessible and readily available. That is what an employee handbook does—either in hard copy or in an electronic version (or both).

 Goals for your handbook

Employee handbooks should be designed to do more than just communicate information and answer routine questions. The handbook should help to achieve organizational goals and objectives. Although a list of rules of conduct and a summary of benefits are important information that helps employees understand what is expected of them and what they should expect from the employer, the goal is to get employees to act in ways that benefit the organization. In this respect, an organization should evaluate the handbook on its ability to help the organization meet its objectives.

One initial and ongoing pupose of an employee handbook is to attract and retain quality employees. An employee handbook should help employees answer—ideally in the affirmative—two important questions: “Why should I work here?” and “Does this company promote my quality of work life and professional accomplishment?” If employees are not receiving a positive message about the organization, the handbook is not doing its job.

The employee handbook also should contribute to organizational orderliness. The handbook should help reduce workplace stress by conveying useful information about:

  • Hours of work
  • Paydays
  • Time off
  • Benefits
  • Health and safety
  • Policies and procedures
  • Other important information
  • In addition, the employee handbook:
  • Must help employers comply with their legal obligations and ethical requirements. An employee handbook will promote consistency and assist employers in preventing claims of disparate treatment. It also must help protect management’s right to make changes and adapt the organization’s policies and programs to changing business realities.
  • Should be a tool to help achieve an organization’s business objectives. In this context, employers should regularly assess the employee handbook, not only from the standpoint of how well it has communicated policies, procedures, programs, and methods, but also from the standpoint of how well it has helped achieve the organization’s goals and objectives. Employee handbooks that fail to help the organization succeed in these areas should be redesigned.

Communicate legal obligations

Several factors affect the composition, scope, and purpose of employee handbooks. First, employing workers in multiple states can complicate attempts to provide uniform employment policies, standardize benefits, and keep all employment practices consistent. Significant differences exist in state equal employment opportunity (EEO) laws, wages, benefits, leave requirements, notice requirements, and a host of other issues. As the number of states in which an employer operates increases, the need to have state-specific handbook sections or even separate handbooks also increases.

Aside from the need to tailor handbook sections to meet the requirements imposed by various states, other factors that could require an organization to create tailored employee handbook sections include:

  • Industry-specific policies and procedures
  • Union and nonunion operations
  • Being a government contractor or subcontractor
  • Diversity in the composition of the workforce
  • Having a variety of employment categories, such as full-time regular employees and part-time temporary employees or independent contractors
  • Having workers who telecommute or work in nontraditional workplaces

One purpose of an employee handbook is to communicate important information about the workplace. This becomes more difficult if some employees have limited English language skills or visual or cognitive impairments. To enhance the ability to communicate with workers in these categories, employers may find it advantageous to have all or parts of an employee handbook translated into native languages, create large-type versions of the handbook, create audio recordings, and/or hold special meetings with these workers to review the handbook contents.

 What to include and exclude

A handbook does not need to be hefty, nor should it be so thin that it misses critical compliance events and culture cues. Employee handbooks come in all shapes and sizes, depending on the size of an organization and the depth to which the client chooses to address various aspects of the employment relationship. They should be manageable documents written in clear and concise language that should be easily used by employees.

Clients should be advised not to make the mistake of treating an employee handbook as an operations manual containing written pronouncements on every aspect of business operations and detailed procedures for following every policy and employment practice. Operations manuals should be distinctly separate documents.

 Maintain at-will language

Employee handbooks should avoid using terms or expressions that could be construed to imply a greater degree of job security and job protection than the organization’s employment-at-will policy provides. If these terms or phrases are used in an employee handbook, an organization could be inviting a claim that its handbook guarantees a greater degree of job security or protection than intended. The term “probationary” may imply a certain degree of job security once the probationary period has been completed, and promises of “long, rewarding careers” should not be made.

 Be wary of contracts

Numerous courts have held that handbooks contain legally enforceable contractual obligations. To be protected from breach of contract lawsuits by current and former employees, your clients should state in the handbook that they retain the right to revise the employment relationship and that any employment handbook is not an employment contract but merely a policy guide, which the company has the right to change or revise at any time, with or without notice.

In addition to including a statement that any published or unpublished policy, practice, procedure, or benefit is subject to change or revision at anytime at an employer’s sole discretion, clients should specify how these changes will be implemented and communicated. Setting forth such information will protect an employer from employee claims that they had certain rights to these policies or benefits, or that the changes were improperly adopted or publicized.

If a business is targeted for an investigation by a government agency, the investigators will examine these written policies as a routine part of their investigation, and their absence creates a negative presumption about an organization’s compliance commitment that may color the investigation. Compliance policies should spell out an organization’s policies and procedures for discrimination, drug-free workplace, employee compensation and time off, training, safety, discipline, retaliation, and more.

In addition, when a terminated employee turns to an attorney for assistance, one of the first steps a lawyer will take is to scrutinize the employee handbook to determine whether the employee was terminated for a dischargeable offense and whether the organization followed the required procedural steps before finalizing the termination. To limit exposure to unnecessary lawsuits, clients should be certain their handbooks do not unintentionally limit the ability to take proper disciplinary action and that they retain the ability to make procedural changes as necessary.

 Make sure every employee has a copy

It is important that every employee, not just new hires, receives a copy of the most recent edition of the employee handbook and that the company representative gets a signed acknowledgement. One of the most frequently heard defenses to employer disciplinary action is: “I didn’t know about that policy, rule, or regulation.” If an employer can conclusively demonstrate that the employee received a copy of the employee handbook and agreed to abide by the handbook’s provisions, this can weaken the employee’s claim.

 Start the new year off right

Employee handbooks must be carefully drafted to eliminate language that could create an implied contract or that could potentially violate federal or state employment laws. Be sure that your clients have their policies reviewed by employment counsel prior to implementation in order to reduce their legal liabilities and ensure that their policies mean what they say and say what they mean.

Whether your clients have five employees or 5,000, a well-crafted employee handbook is part of a strong foundation for both employees and the company. Encourage your clients to update (or create) their employee handbooks this quarter.

 About the author

Laura Kerekes is ThinkHR’s Chief Knowledge Officer and leads the ThinkHR content knowledge and human resources service delivery teams. In addition to her company responsibilities, she writes management, human resources and business articles and presents regularly to management groups regarding human resources best practices.

About ThinkHR: ThinkHR partners with over 650 leading insurance brokers and payroll bureaus with an HR knowledge platform that enables their clients to obtain quick answers to urgent risk and liability questions, protecting clients from loss and legal action; stay informed on the correct responses and decisions for HR management and compliance matters; create web training programs to educate and develop employees in the areas of safety, management and wellness; and save time and money versus expensive alternate legal and HR resources.


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