Employee Handbooks: The Good, The Bad, and The Ugly
Part 1 – The Good
An employee handbook is the administrative cornerstone of an organization’s communication strategy with its employees, the foundation of its legal defense against inevitable lawsuits, and the basis for accountability, performance expectations, and decision making. Despite that pivotal importance, many companies to not approach their employee handbook with the same commensurate vigilance they devote to other business operations. To that end, this three-part series summarizes best practices, points of caution, and issues to avoid when designing, interpreting, and applying an employee handbook.
1. Annual Revision
Employment law, human resources, and business processes are more dynamic, complex, and significant than ever before. Whether it is at the federal, state, or local level, an organization must ensure that its employee handbook remains aligned and adaptive with all of those changes in a timely fashion. Accordingly, it is recommended that the employee handbook be reviewed and revised every November by the management team and a skilled human resources professional and/or employment attorney.
2. Annual Distribution
In light of the annual revision process, it is stridently recommended that the new and improved employee handbook be distributed to every current company employee in January. This annual delivery ensures the company, current legislation, and all employees begin the year with a common understanding of year-to-year changes and forecasted expectations. All employees new to the organization will naturally receive their annual employee handbook as part of the standard New Employee Orientation Program.
3. 100% Compliance
As stated, every employee must receive a new employee handbook each year. By extension, every employee must sign and return the Employee Handbook Receipt and At-will Acknowledgment Form within two weeks of receiving the document. Unless otherwise prevented by state law, failure to return this signed form is tantamount to employee resignation. All returned forms should be scanned to the company’s local area network or cloud account, with the hard copy filed in the employee’s personnel folder.
4. At-will Statement
To maximize legal protection, the company’s at-will statement must be presented in five different locations within the employee handbook: Introductory Period, Employee Classification, Standards of Conduct, Performance Management, and Grievance Policy. It is critical that the employee handbook explicitly state that the company reserves the right to terminate at-will during and after the Introductory Period.
5. Content
While content design is dependent upon each organization and its respective culture, the following list presents the basic content chapters that should be included in the employee handbook: Introduction, Employment, Benefits, Leaves of Absence, Compensation and Timekeeping, Employee Relations and Conduct, Employee Health and Safety, Miscellaneous Policies, and the Employee Handbook Receipt and At-will Acknowledgment Form.
6. Key Policies
The following 20 key policies should be included in every employee handbook: (1) At-will, (2) Desk and Locker Inspection, (3) Information Technology, (4) Immigration Law Compliance, (5) FMLA, (6) Pregnancy Leave, (7) Workplace Harassment, (8) Safety, (9) Workplace Violence Prevention, (10) Reference Requests, (11) Exempt Employee Paycheck Deductions, (12) Interactive Process, (13) Meal and Rest Periods, (14) Benefits, (15) EEO, (16) Vacation/PTO/Paid Sick Leave, (17) Social Media, (18) Grievance Process, (19) Confidentiality, and (20) Workweek.
7. Sanitize the Employee Handbook
Over the years, employee handbooks have transformed from informal communiques to formal organizational documentation. Lamentably, many employee handbooks still contain vestiges of informality mitigating legal protection. Thus, it is vital to delete the following words and contextual phrases from an employee handbook: grounds, cause, guarantee, permanent, malicious, intentional, gross negligence, rights, tenure, progressive discipline, due process, reckless, deliberate, wanton, malevolent, knowing, and egregious.
8. Disclaimers
Disclaimers are statements found throughout the employee handbook (e.g., at-will, benefits, contractual) that grant the organization flexibility when necessary. Standard disclaimers include: “The at-will employment relationship is for an unspecified period of time and may be terminated at-will at any time, either by the employee or the Company for no reason or for any reason not expressly prohibited by law,” “This employee handbook should not be interpreted to create any express or implied contract between the Company and any employee,” “The company reserves the right to revise, modify, supplement, and rescind policies, benefits, and practices at its sole discretion.”
9. Management Team
The company management team must view the employee handbook, in total and in detail, as a strategic document underscoring organizational culture, key administrative policies that contribute to organizational success, and as the fulcrum upon which their decisions must be referenced. Those managers who view this document as a bureaucratic necessity, mistakenly minimize its value, erroneously dismiss its premise, and fatally undermine their own positions as role models within the company.
10. Comprehensive
It is common for employee handbooks to be more than 50 pages long. With increased legal, operational, and administrative demands, the employee handbook must remain in lock-step with these changing requirements, to maintain organizational preservation. While lengthy, a document as important as this should be comprehensive in scope while at the same time maintaining literary efficiency, and not simplistically identified as an easy place to eliminate pages that equivalently erode protection, clarity, and utility.
Employee handbooks are vital to organizational success. An employee handbook that is properly designed, well-written, and consistently applied can fortify the organization in a multitude of ways. Having reviewed hundreds of employee handbooks over the decades, it is my professional belief that adoption of the aforementioned points can add noteworthy confidence to company executives, the company culture, and the employees who rely on communication, trust, and fairness as the composite predicate for promoting sustainable organizational success.
If you have any questions or comments about this topic or anything else related to human resources, simply call me at (760) 685-3800.
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