Common Sense Isn’t All That Common

Should your company have an employee handbook/manual?

If your company’s policies and procedures are scattered throughout a series of memos, E-mails, and other documents, and the only place for an employee to obtain a decision is to knock on your door, then it’s time to create an employee manual. Thus far in 2007, 33 states have passed legislation directly affecting the employer/employee relationship. Therefore, if your manual has not been revised recently, it’s time to compile a new or updated handbook.

There is a common misconception which states that by not having a formal handbook/manual discussing policies and procedures, a company can be shielded from legal liabilities. In actuality, nothing is further from the truth. Employees are far more likely to seek legal counsel when they feel there is arbitrary and erratic enforcement of nonstandard or ill-defined policies. The common defenses such as, “that’s the way we have always done it” or, “it’s just common sense” are not typically viewed as credible by the courts. Relying on current and past activities that are potentially illegal or discriminatory (i.e., referral programs that promote potentially discriminatory hiring, or “comp time” instead of overtime pay) place the company at greater risk for lawsuits and claims with government agencies.

Short and simple — Not war and peace

The handbook should not be an all-inclusive operating manual outlining every minute detail of your organization. Instead, most employee handbooks should be between 35 and 55 pages. If too many details are included, the handbook becomes the proverbial albatross and can bind you into certain responses and actions that may not be necessary. The goal is to create a reader-friendly handbook using easily understandable verbiage rather than pompous legalese. It is also important to spend time on the handbook’s production. This is often your company’s first formal presentation to a new employee; therefore, the handbook should instill a sense of pride and confirm a new hire’s decision to join your organization.

General areas to cover:

  • Essential employment policies covering at-will employment, equal employment opportunity statements, disclaimers regarding contract issues, policies on drug, alcohol and tobacco usage, harassment, confidential information, etc.
  • Overall workplace policies covering hours of operation, dress codes, telephone/ cell phone usage, software usage, parking, security, vehicles, etc.
  • Compensation policies should be included discussing pay periods, paycheck distribution, overtime issues, tardiness, absenteeism, breaks and rest periods, etc.
  • Contingency and emergency policies highlighting inclement weather, natural disasters, safety training, accident prevention, accident notification procedures, etc.

Additionally, the employee handbook can be an integral part in the retention of the company’s most valuable asset – your employees. The handbook should be a well- constructed promotional piece to “sell” your company and its opportunities to employees. The handbook’s introductory welcome letter and company mission statement are just the initial steps in the selling process. Most employees are not aware and/or are not consistently reminded of the vast benefits your company provides. A discussion of the following should be included in your handbook:

  • Employee development, performance evaluations, promotional opportunities and transfer policies.
  • Leaves of absence and time off, holidays, vacation and personal leave, sick leave, funeral and bereavement leave, jury and witness duty, election day, accommodation for members of the military reserve or National Guard and compliance with the Family and Medical Leave, if applicable.
  • Benefits, general benefits policy, group health insurance, disability and life insurance, COBRA, retirement and educational assistance.
  • Government mandated retirement funds, workers compensation, unemployment insurance, etc.

Since a company’s internal and external environment is constantly changing, an employee handbook is needed to serve as a means of communication between the organization and the employee. Provide a copy of the handbook to each staff member. It should be organized in a format that can be easily altered as policies, procedures and laws change.

E-mails, bulletin boards and newsletters from management and training sessions can and should be used to supplement and reinforce the employee handbook’s information; the handbook should be the official source of policies and procedures for all employees.

The conclusion of the handbook should contain a well-constructed and written “receipt and acknowledgment” section verifying that the employee has read and understood the handbook. It is also important to mention that the handbook does not constitute a contract or employment agreement. Additionally, within the handbook it is important to note that both the employer and employee may terminate their employment relationship at any time. Also, note that management has the right to change the handbook without notice.

Send in the attorneys

Before the handbook is distributed to the employees, it should be reviewed by an attorney specializing in employment law to ensure that the verbiage does not represent contractual obligations or contain other potential litigious language. It is my opinion that the attorney should not write the handbook—instead, he or she should provide input regarding clear statements that are defensible in court.