Business Tip – June 2017
“Do you have an employee handbook?” No matter the size of the business, or type of industry, this is one of the first questions I ask employers when speaking with them about their business practices and how they can lower the risk of liabilities. Having a handbook and providing employees copies, however, may not be enough to protect your business from legal liability or other unintended consequences. Lawsuits and agency claims, employee turnover, and poor public relations are a few examples of the unintended consequences that can result from outdated or unlawful handbook provisions, or ones that are misinterpreted or inconsistently administered by managers and supervisors.
To reduce your exposure, your employee handbook must be
2) Tailored to your specific business and industry
3) Regularly reviewed and updated, and
4) Compliant with federal, state, and local laws and regulations.
Liability and an incomplete employee handbook
Why are employee handbooks important? First, handbooks set employer expectations and employee responsibilities. For example, your handbook should explain that the company expects its business practices and internal communications to be kept confidential and outline the consequences for breaching confidentiality. Similarly, your handbook should outline what constitutes prohibited conduct and establish consistent guidelines for disciplining those who violate company policy. Absent such guidelines, your company may be open to legal claims based on arbitrary or inconsistent discipline.
Second, a properly-designed handbook can protect your business against legal liability. For example, handbooks that do not include comprehensive anti-harassment and anti-discrimination policies can expose employers to charges of harassment and discrimination. Your handbook should include policies that prohibit unlawful employment practices and explain to employees what to do if they are harassed or discriminated against and how to report such conduct. Ensuring your employees sign an acknowledgement form when they receive the handbook and any updates can significantly improve your chances of avoiding liability.
A comprehensive, carefully-developed employee handbook can be a valuable resource, providing important information about an organization’s history, mission, values, and culture, as well policies, procedures, and benefits. Consulting with an employment attorney is the best way to make sure you are covering all of the bases.
Company- and industry-specific
No two companies are the same, even in the same industry. The employer who uses cookie-cutter or off-the-shelf handbook templates to craft a handbook takes an unnecessary risk. First, templates rarely cover all of the topics that may be important to your business and typically do not address specific state laws and regulations. For example, many states have recently passed laws regulating whether (and under what circumstances) employees may store firearms in vehicles parked on company property. Even if an off-the-shelf handbook covers this issue, it likely will not cover the law specific to your state (or states, if your business operates in more than one). Moreover, a generic handbook may contain policies that are inconsistent with your company’s practices or customs.
Review. Update. Repeat.
Federal, state, and local labor and employment laws are changing constantly. For example, state and federal anti-discrimination laws are in flux with regard to whether discrimination based on sexual orientation is unlawful. Conduct that may not have been illegal when your handbook was issued may now be prohibited. With the assistance of employment counsel, your human resources professionals should monitor changes in the law and update your company’s policies regularly.
In addition to changes in the law, your handbook should keep up with changes in your company’s policies and practices. For example, your handbook should reflect changes in your IT policies or vacation matrix on a timely basis. Your employees must have access to the current policies to reduce your company’s exposure to liability.
“An ounce of prevention is worth a pound of cure.”
Benjamin Franklin’s famous quote is particularly relevant to employee handbooks. Let me be blunt: each of your employees is a potential plaintiff (or cause of litigation). Making sure you have a comprehensive, tailored, up-to-date handbook could save you a substantial amount of time, money, and grief. If you do not have an employee handbook, I strongly recommend that you get one. If you have one, check when it was last updated. If it has been more than a year since its last update, it is time to get your employee handbook up to snuff.
This article is provided for informational purposes only. It is not intended as legal advice nor does it create an attorney/client relationship between Jackson Lewis P.C. and any readers or recipients. Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances. Reproduction in whole or in part is prohibited without the express written consent of Jackson Lewis P.C.