A well-drafted employee handbook is an important tool to reduce employment law liability. In drafting or updating employee handbooks, it is important to keep in mind the purposes of an employee handbook:
- May serve as key evidence in the legal defense against an employee claim;
- Ensures that company policies are in compliance with state and federal laws;
- Communicates your company’s expectations regarding employee behavior;
- Familiarizes employees with your company: its history, culture, and vision for the future;
- Informs employees about the benefits your company provides (i.e., vacation etc.);
- Answers frequently asked questions from your employees.
The following are six common mistakes employers sometimes make in the handbook drafting and review process:
- Missing or Partial Policies. While most policies are discretionary on the part of an employer (i.e., a dress code policy) there are some policies that must be included in an employee handbook by law (i.e., Family Medical Leave Act policy).
- Internal Contradictions. Over the years, the employee handbook may be reviewed, revised or updated on a piece meal, ad hoc basis. This can result in contradictions between policies. An example of a potentially damaging contradiction is where the handbook contains employment at-will disclaimers, but also states that the employer will always go through progressive discipline steps, in order, prior to discharging an employee.
- Non-Specific Conduct Rules. For the purposes of defending virtually any employment claim, it is important that the prohibited conduct that gave rise to the employee’s discharge was spelled out as clearly as possible to the employee so that there was no question that he or she knew that engaging in the conduct could lead to discharge. For example, it is better to state as a work rule: “Insubordination, including failure or refusal to follow orders of a Supervisor or to carry out assignments or instructions, raising your voice to, threatening or cursing at, or using inappropriate gestures at or near a Supervisor, or disrespecting the authority of a Supervisor in any manner,” rather than simply “Insubordination.”
- Outdated or Inapplicable Policies. Older handbooks or handbooks that were adapted from a purchased “sample handbook” often contain policies that no longer apply or never applied to the majority of employees. If, for example, the company only provides company credit cards to one or two managers and there are over 100 employees, there is no reason to have a two-page policy devoted to the rules pertaining to credit cards in the handbook. Instead, use a separate memo and acknowledgment form devoted to that policy for the few affected employees.
- Too Much Information. This mistake builds on number four above. A handbook is a guide. If a handbook is too detailed and lengthy it can be more difficult for some employees to read, and take away from an employer’s needed flexibility in some circumstances. While there are policies that absolutely should be included in a handbook, including equal opportunity and sexual harassment policies, there are other policies which are better addressed in bulletins or memos to the particular employees affected, such as the credit card policy mentioned in number four above.
- No Signed Acknowledgment. The best drafted handbook in the world may as well have never been written if the employer cannot prove that the employee received and reviewed it. A signed handbook receipt acknowledgment from every employee is essential in demonstrating that the employees were aware of the policies and procedures contained therein, particularly for defending legal claims related to employee discipline and discharge.