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by Carli Seeba, JD
If you have even just one employee, you should have an employee handbook. But what should be covered in it? And, just as importantly, what should not be in it? This article explores some of the common pitfalls that trap employers. While these policies all might sound like good ideas, they can put employers in legal hot water or cause frequent, needless updates to keep the handbook current.
First, employers should stay away from adding anything pre-employment. Employee handbooks are called so for a reason—they are for employees. Since employees are already employed, it makes no sense to include anything prior to their date of hire. This includes such things as pre-employment background checks, driving records and drug testing. By including these in an employee handbook, employers could be giving mere applicants the illusion that they are employed. Paired with that, employers should not distribute an employee handbook to a person until they are officially hired. Doing so again runs the risk of creating the illusion of employment.
Secondly, employers like their employees to know that their employment is “at-will.” Every employee handbook in an at-will employment state should include a disclaimer to this effect. Where employers run into trouble is peppering it frequently throughout their handbook. Saying it often does not strengthen the argument. In fact, employers might be setting themselves up for trouble. One typo in one spot in the handbook could nullify an employee’s at-will employment.
Thirdly, while an employee handbook is a legal document, it does not need to be done in legalese. While a handbook should be professional and well-written, it should not contain much legalese or fancy language. It should be easily understandable to the average individual. Courts do not like documents that require an average person to have to hire a lawyer to decipher.
Another pitfall employers often fall into is to include specifics of who to contact in specific situations. For example, a handbook directs employees to contact Barbara in cases of sexual harassment. What if Barbara leaves? The employer then has to update the handbook. This can prove costly in frequent or needless updates. The one exception is the names of owners. Ownership changes do not normally occur frequently and oftentimes a new owner will want their own employee handbook. The solution is to instead of directing employees to Barbara, direct the employees to the human resources department.
Frequently, employers also want to add sections about annual performance evaluations or drug policies. While they sound excellent on the surface, employers must be prepared to follow through on what they put in their handbook. If a company does sporadic evaluations, then it should not be in your handbook. Likewise, if an employer isn’t prepared to follow through on an employee suspected of abusing substances, then it shouldn’t be in the handbook. While some policies may sound nice, if they aren’t followed through on it can nullify the whole handbook. Other sections employers should avoid are those that do not apply to them. The most frequent one is Family Medical Leave Act. If an employer has less than 50 full time employees, then it should not be in their handbook, otherwise they could be committing themselves to provide that leave to their employees.
Employers should also avoid any section that could leave an employee feeling entitled. This includes sections about promotions, advances, compensation reviews and raises. So many factors go into these types of decisions, only one of which is employee performance. If an employer is able to give a raise or promote an individual, the process does not need to be in the handbook.
Another section that should be omitted is arbitration policies. As an employer’s at-will employment disclaimer should state, the handbook is not a contract of employment. However, making an employee sign an arbitration agreement is a contract. The two cannot co-exist in the same document. Either the at-will employment is nullified or the arbitration contract is voided.
Another policy employers like to add is a probationary period. For instance, for the first 90 days employees are subject to special restrictions. This should be avoided at all costs. It can be interpreted as a contract or promise of future employment and nullify the at-will nature of employment. If an employee is the wrong fit, either document and terminate or move them to another position. There is no need for a probationary or training period.
Employer flexibility is important in a handbook. Employers should avoid long lists of fireable offenses. It’s impossible to list every situation which could result in termination. Employers should keep it flexible or risk ending up in a situation where an employee doesn’t commit one of the listed offenses and the employer is then unable to terminate that employee. Additionally, employers should stay away from a specific punishment schedule. For example, the first offense is a verbal warning, the second offense is a written warning and the third offense is termination. Another example is a scheme of “points” assigned to each violation and once a certain number is reached, the employee is terminated. While employees should be treated equally, employers should avoid tying their hands in regards to discipline. Maybe the second violation is especially egregious. Or maybe the third violation was a simple miscommunication to an otherwise solid employee. Leaving flexibility is important.
Finally, every handbook should include an acknowledgement of receipt, signed by the employee and put in their employee file. This should not have a counter-signed line for management.
Having an employee handbook is only the first step. Employers need a strong document that can guide all employees and hold up to legal scrutiny. Being cognizant of what should go into a handbook is just as important as what should be avoided.