An Employers Guide to Employee Handbooks

Why Should My Company Have an Employee Handbook?

The following are just some of the several advantages that a well-drafted employee handbook provides an employer:

1. It opens lines of communication and engenders confidence in employees who know what to expect and what is expected of them.
2. By explaining the rationale motivating certain policies, it can help to avoid a wide range of disputes.
3. It makes it easier for management level employees to enforce policies and saves time by answering commonly asked questions in advance.
4. It helps to create, not just report, the company culture regarding sensitive issues such as sexual harassment, cultural diversity, drugs and alcohol, and smoking.
5. By setting forth procedures used to resolve internal disputes, a handbook may serve to stave off potential lawsuits.

What Should I Include in My Company’s Handbook?

Handbook Introduction

An effective introduction should include information about the ideological and entrepreneurial foundations of the firm and its goals; a brief statement of the history of the enterprise as well as a recounting of a mission statement will do. In addition, the introduction should explain that the handbook is intended to inform employees of policies applicable to all employees; however, the employer should clearly reserve the right to change the policies at any time. Because not even the most thoughtfully drafted procedure can anticipate all possible situations, reserving the right to change specific provisions at any time ensures that the employer will not be bound by a policy which may not serve the best interests of the employee or the employer under the given circumstances.

The Workweek, Breaks, Lateness and Overtime

Before explaining specific policies related to hours, pay, breaks, tardiness, and overtime, a well-drafted employee handbook should explain how various employees fit into the scheme contemplated by the Fair Labor Standards Act. A brief overview of the provisions of that Act will show what that law requires. Usually handbooks are more generous and the employees should know that.

The Workweek

A handbook should make clear the number of hours the employer expects the employees to work each week and how each employee needs to keep track of time worked. Whether the business uses a time clock or some alternative means of computing hours worked, explaining the policy will ensure that the employee knows whose responsibility it is to keep accurate records of time worked and other time-keeping expectations. It also may ultimately limit the scope of an employer’s liability in the event of a dispute.

Breaks

Provisions addressing breaks should be included in the section on expected weekly hours and the workweek. Such a section serves at least two important purposes. First, it lets the employee know when breaks are available and appropriate. Second, it sets forth the employer’s intent to comply with applicable state law. For example, in Oregon, employees are allowed one break of not less than ten minutes for every four hours worked. Because the employer must compensate the employee for break time as part of the employees hours worked it is organizationally expedient to associate the break section with the section regarding hours worked.

Absenteeism and Lateness

This section of the handbook should set forth the procedures the employer expects the employee to follow for unavoidable absences. It should also explain that excessive absence or repeated lateness might result in penalties up to and including termination.

Overtime

An effective handbook should explain the method of calculating overtime hours and whether the employee must seek authorization from a supervisor before working more than forty hours in a given workweek. On the other hand, if working overtime is mandatory, the handbook should state this, and explain that the employer will consider the failure to work overtime hours as an unexcused absence.

Employer-Specific Rules and Procedures

This section of an employee handbook allows for great flexibility from employer to employer, and is one in which an employer can shape the corporate culture. Emphasizing certain subjects notifies employees that the employer has concerns in these areas. For example, this section may contain company policies related to subjects such as E-Mail and Internet usage, solicitation by or of competitors, workplace violence, use of office supplies and equipment, performance evaluations, bulletin board postings, drug and alcohol abuse, smoking areas, nepotism, employee dating, written complaints, employee appearance and grooming, and workplace civility.

The FMLA, ADA, and Other Required Policies

Although a well-drafted handbook should state that the policies in it are subject to change at any time, some of the policies are beyond the employer’s control. Various federal, state and local laws apply to business enterprises depending upon the size of the particular company and the industry in which it is active. Before drafting a handbook, savvy employers need to research these laws, or hire an attorney to do it for them; working knowledge of statutory requirements is essential.

Benefits

Whatever specific benefits packages an employer may offer, there are a few things all handbooks should include. These concern paid and unpaid leave, vacation time, holidays, and retirement provisions. This section of the handbook should also note that any description of benefits is only partial, and that, at least for those benefits covered by federal law requiring a Supplementary Plan Description or SPD, the employer will provide a detailed description of the benefit in a separate document.

Discipline and Termination

Perhaps no single provision of an employee handbook contains as many potential pitfalls as that related to discipline and termination. This is because it is very easy for a handbook to alter the terms of at-will employment, thus exposing an employer to liability for wrongful discharge and any number of other employment related claims. The point: BE CAREFUL. For a detailed discussion regarding this legal minefield read Du Val Business Law’s expanded article, “Preserving the At-Will Nature of Employment.”

Handbook Receipt Forms

A company administrator or human resources director should distribute handbooks to all new employees. As each employee receives his handbook, he or she should sign a form acknowledging its receipt.

General Drafting Guidelines

While the organization and tone of any given handbook will vary between employers, some general guidelines to keep in mind are:

1. Keep it short
2. Keep it simple
3. Write to the audience, not at them super
4. Don’t tax the reader’s eye; and most importantly,
5. Emphasize what is most important.

Keep It Current

Once an employer has drafted a proficient handbook periodic updates are still required. As the law changes or concerns motivating policies disappear and new concerns manifest themselves, employers should update the handbook to reflect these changes. As the handbook evolves, employers should require all employees covered by its policies to sign a receipt acknowledging that they are aware of the changes and that the policies of the new handbook supersede those of the old handbook. For knowledgeable assistance, contact Slinde Nelson.