Employee handbooks are an important tool that is used by employers to really communicate a company’s:
- Philosophy
- History
- Goals
- Policies and procedures
- Equal employment opportunities
- Time off policies
- Compensation
- Employment guidelines
- Standards of conduct, such as workplace health and safety, payroll, records keeping and termination
These are some very basic, at-a-minimum handbook elements. You can make your employee handbooks a lot more complex and explain in detail every little thing about your company, but some companies choose to take a bare-minimum approach to their employee handbooks. This is just fine as long as they include necessary elements, such as the ones mentioned above, and policy language specifically required by applicable state and federal law.
Common Mistakes
In my experiences, I’ve dealt with a variety of small- to medium-sized businesses, and one of the most common mistakes they make when developing their employee handbooks has been not tailoring it to their company.
Employee handbooks are definitely not “one size fits all.” For example, if your company does business in multiple states, you’ll want to have multiple employee handbooks—one for each state or at the very least an addendum for each state. This is especially important because state laws can vary considerably.
Another common mistake is making commitments. When you’re drafting your employee handbooks, it’s important to avoid making any commitments to employees, such as guaranteeing employment for a certain length of time or stating that you do performance evaluations annually. When you use language like this, you are making a commitment that could potentially be viewed as a deviation from at-will employment (and possibly as an actual employment contract), and leave you open to a lawsuit if you don’t follow through on the commitment.
For example, if you say you do performance evaluations annually, and then you decide not to do reviews one year, employees have a legitimate reason to raise concern that the company is not adhering to its published policies. And, this could be especially troublesome if inconsistent use of the evaluation system can somehow point to either inadvertent or purposeful discrimination. This is why you need to make sure your employee handbook language is clear and that after you write a policy, you hold up your end of the bargain and implement all policies consistently. One way to give your company more flexibility in this regard (in this particular example) would be to use the word “generally.” So the policy might say something like, “Reviews are generally conducted on an annual basis.”
One other common mistake employers make regarding their employee handbooks is they don’t update them enough. Laws change, new laws are passed, your policies change or you add new policies—so you want your employee handbooks to reflect the changes, too.
Avoiding Mistakes
One of the best ways to avoid making mistakes with your employee handbooks is to perform an annual audit of them. This would require you (through your HR personnel) to review your employee handbook(s) once a year. It is also advisable to have an employment lawyer review your handbook. Employment lawyers are up-to-speed on ever-changing employment laws and are able to better advise you with wording your policies correctly and making continual updates. It is always recommended as a best practice to contact an employment attorney and work closely with your HR team when you’re getting ready to create or update an employee handbook.