Posted on January 16, 2013

The Employee Handbook: A Good Move or Another Liability?

From the HR Pros of the HR Support Center

It’s an exciting time to begin a new year with great start for your business! One very important step to take in making sure you launch into 2013 in stride deals with the employee handbook.

There is no legal obligation to publish one, and it may create unintended legal obligations for the employer. At the same time, you can craft it as a great tool and foundation to communicate your company’s vision, expectations, and goals to your employees. Nowadays, employees especially expect and appreciate having some set of guidelines to help understand the employer policies, practices, and procedures as well as their own employee responsibilities.

A great football coach may have a great team of players, but if there’s no playbook, confusion and chaos can quickly consume everyone. The employee handbook is your playbook to help ensure continued success between managers and employees. This article briefly highlights for you some key benefits, helpful tips, and distribution methods to get such a manual effectively in place.

So, does having such a handbook in place make sense for every business? Not necessarily, particularly if you’ve only a handful of employees with lots of open communication. Like any business looking at ways to grow, however, your legal employment responsibilities also get more complicated as you hire more employees to help grow the business. Once you start having about 15 or so employees, written policies and procedures become very highly recommended.

The Benefits

The handbook can provide beneficial results. Most employees really want to be successful and simply want to know “the rules of the game” in order to do well within your company. A good handbook describes the pay and benefits, performance expectations, work schedules, dress codes, time off conditions, promotion process, etc. Employers often can better manage their staff since the objectives for each job position have been clarified and certain policies have been established before possible volatile workplace issues surface.

Now, the biggest reason for establishing the handbook is increased protection. While legal disputes can’t be completely avoided, you can clearly minimize the risks. Generally, courts consider written and verbal policies as contracts. Verbal policies often can be misinterpreted easily or delivered by someone with no authority to make certain promises—not a good situation for you. Build a written document, and you give your company a much stronger position of not having a dreaded court case become a grueling owner-said, employee-said situation.

Especially in terms of disciplinary and termination events, a sound handbook can minimize hasty and rash decisions to immediately fire an employee. It also provides a helpful guide for resolving and settling employment disputes—thus preserving your company’s bottom line.

Some Tips for an Effective Employee Handbook

* Insert disclaimers such as an employment-at-will statement in which the company expressly states that employment can be terminated at any time, for any reason. Often, policy statements illustrate specific action steps to take prior to termination. Keep in mind that this does not mean the courts will support every single employer reason (e.g. termination based on one’s disabilities, sex, or religion).
* Cite or quote federal, state, and/or city regulations and statutes relating to each of the company's employment policies.
* Avoid restrictive language. Using words like "will" or "must" may bind employers to agreements or actions not intended originally. Furthermore, phrases such as "terms and conditions of employment" or "seniority" could be viewed evidence of an employment contract.
* Consider input from employees and all management levels to address as best as possible the diversity of concerns. This process can promote greater buy-in and cohesiveness in your workforce as well especially when involving significant updates and changes.
* Periodically review and revise as needed. The last thing you need is to have a handbook that’s not compliant with current laws let alone not aligned with your business goals and objectives. On that note, clearly communicate and state reserving the right to change, add or terminate policies at any time.

Electronic or Hard Copy?

Some employers are publishing handbooks electronically instead of issuing a hard copy to each employee (increasingly common among businesses with an intranet not available to the public). Some (often those who are public employers) publish their policies available on websites.

One advantage reflects the ease and convenience to revise and update the handbook and specific policies. A major disadvantage involves the cumbersome efforts to ensure that individual employees have a reviewed a copy and acknowledge its receipt which can be very difficult to prove in court. Whichever mode you choose, make sure you get each employee to complete and sign a hard copy “Acknowledgment of Receipt” with a copy for the employee’s and your own HR files.

The Acknowledgment and Receipt Form ideally includes the following points:

* Receipt of the handbook
* Instruction to read the handbook in its entirety
* Actual reading and understanding of the handbook information
* Opportunity to ask questions and have them answered timely
* Employment is at will
* The company can alter policies and update with newer versions
* The handbook is not a contract

Especially if you have an outdated copy lying around or no copy whatsoever, now is a great time to take a good look at making sure your handbook is in place, up to speed, and working for your company. In all, by preventing disagreements and confusion, helping the business stay out of court, and even improving communication with the employees, the employee handbook can help you save time and money!

Wishing you much success in 2013!

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