Despite its numerous benefits, many companies “drag their feet”
when it comes to developing and/or updating an employee handbook. This is
a mistake. The process of creating and updating employee handbooks
encourages employers to determine, evaluate and periodically review their
policies and benefits in accordance with their needs and applicable legal
requirements. The process should be viewed as a welcomed opportunity to
increase the value of your business.
The success of any business is directly related to its employees.
In order to be successful, businesses must maintain a positive employee
morale. Consistent, clear employer-employee communication is vitally
necessary for productive and profitable employment relationships. Although
face-to-face management-employee communication is essential to establishing
a successful business, it should not be the exclusive means of
communicating.
An employee handbook is an extremely valuable tool in communicating
with an employee as to what a company expects from the employee and what
the employee can expect from the company. A properly drafted handbook
opens the lines of communication and prevents employee misunderstandings.
It can also be a valuable defense tool for an employer faced with a lawsuit
by an employee claiming entitlement to “permanent” employment or some other
benefit contrary to the terms of an employee handbook.
You should include provisions in your company’s handbook that (1)
reflect your company’s existing policies and working climate; (2)
effectively provide your company with maximum flexibility in making
personnel decisions; and (3) comply with federal, California, and other
applicable state laws.
In order to effectively communicate the purpose and benefit of your
employee handbook, you should state, as part of an introductory statement,
that the handbook is intended to provide basic information about the
policies at your company and the benefits and services provided to the
employee. This introductory statement should also inform the employees
that the company reserves the right to amend the handbook by written
notice, and that the handbook does not constitute a contract for continued
employment.
Every handbook should contain policies prohibiting discrimination
and harassment on the basis of race, color, religion, sex, sexual
orientation, age, ancestry, national origin, marital status, disability,
medical condition (as defined under California employment laws), status as
a Vietnam-era veteran, qualified disabled veteran, or any other protected
status pursuant to State or federal law. These policies should also
educate your employees as to whom they should complain about harassment
and/or discrimination and how to do so. These policies should also
specifically prohibit retaliation against anyone who complains about
discrimination or harassment. In addition, you should have a separate
policy regarding sexual harassment prevention, which also includes the
complaint procedures and a non-retaliation provision.
In order to protect your company’s trade secret, proprietary, and
other confidential information, your handbook should contain
confidentiality and conflict of interest policies. These policies can
define and prohibit the use and disclosure of confidential information
other than for authorized business purposes and to authorized individuals.
Additionally, it is important to include policies stating that the
company’s facilities and communication systems, such as telephones,
computers, e-mail and voice mail, are limited to the conduct of company
business, and are not for personal use. There should be a clear and direct
statement that an individual does not have any expectation of privacy with
respect to the use of these systems.
Employers can create the ability to terminate employees at will,
i.e., for any reason or for no reason, with or without cause or notice, if
proper language is placed in employee handbooks, policies, and application
forms. In deciding whether to include such provisions in the handbook, it
is necessary to balance the company’s desire for good personnel relations
(and in the case of certain employers, the desire to maintain a union-free
atmosphere) against the flexibility and legal protection that at-will
language provides to the company. While each employer should strike its
own balance, most companies would be best served by adopting at will
employment, by including appropriate language in their handbook, and making
the language consistent in their employment application forms and other
employment agreements.
The manner in which the company handles discipline and discharge
should also be included in the handbook. Procedures should provide the
company with the ability to be flexible and impose discipline that is
appropriate to the situation, rather than require a predetermined
multi-step disciplinary procedure to be rigidly applied in every situation.
Rules of conduct that are clearly written and fairly and uniformly
applied should also be included. Employees need to be aware of all
applicable rules, policies, procedures, and expected standards of behavior
and performance in the workplace.
Describing employee benefits in the handbook is equally as
important as describing your employment policies. Detailed descriptions of
employee compensation and benefit policies, including pay days, overtime,
sick pay, vacation pay, and holiday pay should be clearly set forth,
including clear and concise language describing any and all accrual methods
and eligibility requirements for those benefits. Additionally, for
purposes of determining eligibility for these benefits, a description of
the status of employees, including full-time, part-time, temporary,
probationary, exempt and non-exempt, should also be included.
Clearly enumerated available leaves of absences and their terms and
conditions, including family and medical leave (if applicable), pregnancy
leave, disability leave, bereavement leave, leave for jury duty, military
leave, and/or leave for school and child day care facility visits should
all be contained in the handbook. Some of these leaves are required by
law, and others are solely at the option of the company. Before adopting
any leave of absence policy, it is important that the company be aware of
the legal requirements and consider the need to coordinate the various
available leave entitlements.
Problem resolution procedures including the use of arbitration
agreements to resolve employment disputes should also be considered. A
properly written arbitration clause can avoid a jury trial and result in a
dispute being resolved instead by an arbitrator experienced in employment
law and workplace issues.
If you have a substantial number of employees who do not understand
English, you should consider having the handbook translated into the
necessary languages. This will help to ensure communication of your
policies to each and every employee.
Finally, it is imperative that all employees be required to sign an
acknowledgment indicating receipt of a copy of the handbook and an
agreement to read, understand, and be bound by its provisions. Each
acknowledgment should be maintained in the employee’s personnel file.
These topics can provide a sound beginning in developing an
employee handbook; however, the list is not meant to be all encompassing or
mandatory. It is also not intended to substitute for a discussion with
employment counsel regarding particular State or federal laws that may be
applicable to any particular industry or business.
Any policies contained in the handbook must be followed
consistently, otherwise employees may use the handbook as a sword against
the company in employment related litigation. For this reason, when
developing a handbook, a company should be thorough, but practical. Your
company’s handbook policies should reflect your company’s philosophy and be
something the Company can live with on a daily basis. When developed
properly, reviewed regularly, and followed uniformly, an employee handbook
is an invaluable tool to contribute to the success of your company.
Jodi L. Karpel is
