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A Well Written and Compliant Employee Handbook is the Cornerstone of the Employer-Employee Relationship

Is Your Employee Handbook a Liability?

Most employers understand the need to develop and implement an employee handbook. Whether you have five (5) employees or 10,000, the employee handbook is the cornerstone of the employer-employee relationship. In fact, in our consulting practice, we find the need for an effective employee handbook is more important in the small employer-employee relationship because relationships are direct and personal.

In today’s environment, employers cannot tell an applicant with whom they’ve hired, “Come to work, do a good job, and we’ll take care of you.” In today’s workplace environment, it’s incumbent upon employers to articulate not only what the employer expects from the employee, but also what the employee can expect from the company. A well written employee handbook will accomplish these two (2) key tenets and, in essence, become the critical document to undergird the relationship.

However, when SESCO reviews a handbook submitted by a client, a significant majority contain inappropriate or illegal information or, most importantly, do not contain suggested and necessary policies. Thus, the great majority of employee handbooks that SESCO reviews, in fact, create liability for the employer versus being a proactive, key human resource management system.

In addition, SESCO finds that many employee handbooks are purchased “off the shelf” and not customized to their organization or to their state or even that matter, to their specific industry in which they provide service. Each one of these areas are critical for an employee handbook to be effective. We also find employers sharing employee handbooks and simply putting their name on someone else’s and this creates significant liability and certainly doesn’t tell the story of the specific opportunities for employees as well as the advantage for working for the company.

The following are SESCO tips in ensuring that your organization implements an effective employee handbook:

1.      Layout – The layout and “tone” of the employee handbook needs to be reader friendly. Sections need to include Welcome and Opening to include background and history of the organization, What the Employer Expects from the Employee, Hours of Work and Benefits, What the Employee Can Expect from the Employer, and Communications and Closing Word. The employee handbook should not be overly formal and should be written in a pro-employee/pro-family tone. It should never be considered a document to only hold employees accountable — a stick or discipline tool.

2.      Customized to the Employer and Industry – The company has a story to tell. And I’m sure owners and managers are very proud of this story. Always include information about the organization to include your history, organizations in the community that you support, interesting facts and advantages to work for the organization, etc. Additionally, policies need to be included that address industry-specific realities to include OSHA/safety, customer service, education and training/certifications, compensation practices and others. Operating a business in today’s environment is very complex and an employer’s greatest asset is their employees and the employee handbook needs to make the complex understandable via policies and procedures.

3.      State-specific – The trend over the past several years has been states and even local counties and municipalities implementing specific employment laws and standards. What we have seen in California over the past several years is now spreading across the country. State-specific policies are complex and the employee handbook must address these in a way that employees understand the requirements. Typical (but not limited to) state and local employment laws include overtime laws, whether or not an employer has to pay earned, unused vacation or paid time off at the time of separation, breaks and meals, timing of paychecks as well as timing of paychecks to employees who have separated, allowable deductions, uniform and education deductions or reimbursements, and many others.

What we do not want to do with this article is to overwhelm employers implying that there is too much technical and employment law consideration that they do not develop and implement an employee handbook. If you find an advisor such as SESCO who literally writes hundreds of handbooks annually, in all 50 states, the process is rather straightforward, simple and cost effective. SESCO strongly recommends that if you have not had your handbook reviewed in the last 12 months, that you forward it to us for a technical review. This review includes a letter with staff recommendations. If you do not have an employee handbook or yours is so dated that it is not worth revising, again, contact SESCO and we will provide you a checklist for development.

In summary, know that the employee handbook need not to include every detail of your policies or every provision of the law impacting the workplace. However, it should be worded carefully so that it’s not a liability and that you do have the flexibility that you need in today’s working environment.

Finally, the top 10 considerations for employee handbook development in today’s employment environment include:

1.      Social Media and Company/Data Privacy
2.      Reasonable Accommodation/Physical and Mental Health Conditions
3.      Retaliation
4.      Wage and Payroll
5.      Leave Benefits
6.      Attendance
7.      Smoking and Marijuana Use
8.      Substance Abuse including prescription medication

Bill Ford
SESCO Management Consultants

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