Top Employee Handbook Mistakes
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- Donald Wheeler
- 7 years ago
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1 Top Employee Handbook Mistakes When challenged by a current or former employee in a court action, the employer s employee handbook can be a great defensive asset. In fact, many employers have had cases dismissed because of language contained in their employee handbook. The reverse is also true. Sloppy, forgotten, or unintended provisions in an employee handbook can also be a source of employer liability. Here is a list of common mistakes. 1. Failing to Understand the Purpose and Value of a Handbook From a defense lawyer s standpoint, the purpose of a handbook can be simply stated: An employee handbook is a plainly written and relatively short document that: (1) expressly defines the nature of the workplace relationship; (2) contains all legally mandated policies (prohibition against discrimination, equal employment opportunity, FMLA language, etc.); (3) identifies the mechanics and rules of employment (who to talk to about what, who and how to report important matters, etc.); (4) plainly states that the employer intends to comply with all laws; (5) plainly states the employer expects the employee to do the same; and (6) states that the employer wants the company to be a good place to work. It is also important for an employer to understand what an employee handbook is not. An employee handbook should not be combined with a procedure manual or a detailed listing of how an employee should conduct various aspects of his/her jobs. While there may be a need for such detailed procedural documentation and instruction, they shouldn t form part of the employee handbook. The reason for this is straightforward. Courts have a tendency to view employee handbooks as something akin to a contract. While a properly written handbook does not become a contract for a specified term of employment or a guarantee of continued employment, courts will view the employer s unilateral expression of the rules of employment as a commitment by the employer to act as the handbook states it will act. In most jurisdictions, employees can sue an employer for breach of an express term of an employee handbook. As a result, simplicity and clarity is the employer s friend. A handbook is the basic expression of the rules of the employment and a concise statement of the employer s expectations of the employee and of the employer s express commitments to the employee. There is no reason to use hypothetical or imagined circumstances in your handbook. The rules, plainly stated, can speak for themselves. Additionally, if your handbook is the size of a phone book, there is a very good possibility no one is bothering to look at it. 2. Failure to Update If your company has a phone book sized employee handbook that is collecting dust in the bottom of a desk drawer, you have a problem. A rarely updated and infrequently referred to employee handbook can create more problems for the employer than it solves. First, a document no one has read lately is likely to contain terms and provisions that the company or its workers forgot about long ago. This is bad. Whenever a company can be shown to have violated the terms of its own express written policies, a plaintiff or complaining employee is well on the way towards succeeding in a challenge or lawsuit. To be effective and current, handbooks should be audited (read by management) and updated on a regular basis. Best practice: At least every two years. 1
2 Employee handbooks should contain an employee acknowledgment that the employee signs and returns. That acknowledgment should state that the employee has: (1) received the handbook; and (2) has read it. In between those updates, an employer should send reminder communications to workers whenever violations of company policies have been noted. Even without such violations, periodic reminders to employees that employment with the company is governed by the terms and conditions outlined in the employment handbook can be enormously useful. These communications can be made by whatever channels the employer normally uses for talking to its workers: posting on bulletin boards, notes slipped into paychecks, company-wide s, posting on intranet or internal company web pages, letters, handouts, etc. Although anything can be pushed to a ridiculous extreme, reminding employees that their employment is governed by the terms of the employee handbook is hard to do too often. 3. Making the Employee Handbook Too Complicated, Too Long, or in a Language Employees Do Not Understand Even though an employee handbook has a legal effect, it is not a legal document. Use lay language. Speak clearly and simply. Use declarative sentences. Avoid legal jargon whenever possible. Speak in the language that your employees are likely to understand. In cases where you have a large non-english speaking workforce or where a significant portion of your workforce speaks English as a second language, consider providing a translation. 4. One-Size Does Not Fit All If you are going to use an off-the-shelf commercial provided template for your handbook, make sure that: (1) you right size the policies contained in the handbook to the number of employees that you have; and (2) that the handbook fits the specifics of your geographic location. Employment laws, including mandatory policies that must be announced to all workers, vary from state to state and even city to city. That means you must carefully scrutinize commercial or offthe-shelf policy templates to ensure that they do not obligate you to accept policies that you are not legally obligated to provide. The general rule is that once you ve published the policy, you are obligated to perform pursuant to it. A common mistake is for employers with fewer than 50 employees to include Family and Medical Leave Act (or state equivalent leave) language in handbooks. If you announce an employee s entitlement to 12 weeks of unpaid leave, you are likely obligated to provide it, even if you did not meet the 50 employee threshold for providing such leave. 2
3 5. Failure to Follow Common Dos and Don ts Here, as sort of a lightening round, are some rapid fire dos and don ts: Don t forget to define the employment relationship as at-will where your local or state laws permit it Do define the working relationship as a at-will whenever state and local laws permit Get the idea? Do define the employment relationship as at-will whenever state and local laws permit. (We included this again, just in case you didn t get the idea.) Don t include probationary/introductory periods or permanent employee classifications that are at odds with the at-will employment relationship Don t make guarantees of events that will occur or not occur in the future (such as service awards for years of employment, achievement of annual goals, pay raise structures, etc.). You will be held to such express promises. 6. Failure to Define At-Will Employment or Defining it Incorrectly Courts will hold an employer to the express terms of its employee handbook. Thus, it makes little sense for an employer to destroy or limit the at-will relationship by defining it improperly. Simply put, employment at-will is employment where either the employer or employee may terminate the relationship at any time, with or without notice and with or without cause. Of course, there are legal limitations on the at-will relationship. An at-will relationship does not permit an employer to terminate the employment for an illegal reason (such as illegal discrimination or retaliation) but failure to state that the employment is at will can give rise to an implication of an implied in fact contract not to terminate. 7. Failure to Include an Equal Employment Opportunity Statement A statement of this kind is required under federal law and in all states. The policy communicates a commitment to provide employees and applicants with employment opportunities without regard to any protected class: race, color, religion, sex, national origin, physical or mental disability, or medical or genetic condition, marital status, veteran status, or any other class protected under state or federal law. Many jurisdictions broaden this list and include gender identity, gender expression, sexual orientation and variety of other protected activities and status. 8. Failing to Expressly Reserve the Right to Change and Modify the Handbook With or Without Notice Even though most employment is at-will, which means the terms and conditions of employment (like the employment itself) can change at any time for any lawful reason with or without notice, the employer s right to modify and change the handbook at any time should be stated expressly in the handbook. By so doing, you have made the employer s right to change the handbook at any time with or without advance notice a term and condition of employment with the company. This is a good idea. 3
4 9. Including Progressive Discipline Policies We ve already discussed that handbooks shouldn t promise to provide anything unless the employer is prepared to face a breach of contract claim for its failure to provide whatever the handbook promises. Employers often include progressive discipline policies in a handbook because such provisions strike them as equitable and fair. They may well be but they are also an express written limitation on the employer s ability to terminate employment on an at-will basis (with or without cause and with or without notice). If the company wishes the employment to be truly at will (which provides equal bilateral authority to end or change the relationship on both employer and employee) then it should either: (1) omit any discussion or progressive discipline; or (2) carefully draft the progressive discipline policy to state clearly and plainly that the statement of the progressive discipline does not limit in any way the employer s ability to terminate employment or discipline employees without adherence to any preconditions, including the progressive discipline policy contained in the handbook. This mistake might be entitled, don t say things you don t mean. If you do wish to manage your workplace subject to an express progressive discipline obligation, be sure to carve out those situations such as economic necessity, reduction in force, closure of the business, etc. which may result in termination or layoff without utilization of the progressive discipline policy. 10. Forget Safety Everywhere, employers have the obligation of providing a safe and healthful workplace to their employees. The specific details of that obligation vary from state to state and are governed and regulated by a variety of laws from federal to local. It is always wise and useful, however, for the handbook to reflect the employer s desire that the workplace be a safe and healthful one. Requiring employees to report unsafe conditions, promising them non-retaliation for doing so, and identifying specific reporting points or programs and plans within the company by which they may do so, is a good idea. That said, avoid making any safety section of an employee handbook too detailed. Most states require employers to have safety plans and programs in place in the workplace based upon the specific hazards present in that particular environment. Don t try to include those in a handbook. Remember, the goal of the handbook is to generally state the terms and conditions of employment and a desire of the employer that it comply with the law and an expectation that the employee does the same. Know and understand your company s safety obligations to its employees. 11. Improperly Limit Medical Leaves It is true that federal and state medical leave laws have finite limits. Under the FMLA, that limit is 12 weeks of unpaid leave within a 12 month period. Many employers provide more generous medical leave than that required by the FMLA or equivalent state statute. Stating in a handbook, however, that there is an outside limit on the amount of leave which an employee can take for a medical purpose can create a serious legal problem. In the past several years, regulatory agencies have challenged employer s leave policies that put such limits on the amount of leave required. This is because the Americans with Disabilities Act (and equivalent state laws) require employers to consider periods of unpaid medical leave as an accommodation for a disabled person. By putting a finite limit on the amount of medical related leave that an employer will allow in its policies, these agencies have concluded that such fixed limits are inconsistent with the employer s duty (imposed under the ADA or similar anti-disability discrimination law) to reasonably accommodate an employee s disabling medical condition. 4
5 12. Failure to Consider the Reality of the Virtual World In many workplaces, employees need to access and the internet and even social media to do their work. There are many risks that use of such electronic communications can pose for an employer but, if understood, the utilities of these programs and devices usually outweigh their risks. But these risks should be understood. A detailed discussion of this topic is beyond the scope of this article but here are some important points to remember: Bring Your Own Device policies. Does your jurisdiction require your company to reimburse employees for the company s reliance on an employee owned device or cellular telephone subscription in the course of its business? If you can t answer this question off the top of your head, consult with employment counsel. Does your policy prohibit the use of the company s electronic communication systems for any non business purpose? Such policies are practically impossible to enforce but in addition to be impractical, they may also run afoul of recent National Labor Relations Board decisions that such policies may chill efforts to organize unions. If nonexempt employees can access s and be contacted by customers or coworkers on company business after hours, is the company monitoring the extent of such use to ensure that all hours worked and overtime is being paid? Does your policy make clear that all communications through company systems, equipment and networks is owned by the employer and subject to its review and control? The policy should state that employees do not have any reasonable expectation of privacy in documents or other communications on the employer s equipment, systems or networks. This should include voic s and text messages as well as . There are many other issues that an informed employer should understand in drafting and adopting an electronic communications policy in an employee handbook. More important, however, is to make sure that the policies expressed in the handbook actually reflect the reality of what occurs in the workplace. Can Help Did you find this white paper helpful? Please share it with colleagues using the share link at the bottom of each page. To stay informed on HR issues, challenges and best practices for compliance, subscribe to the HRUSA blog at blog. hrusa.com. To learn more about HRUSA resources, just call our Customer Service Representatives at (844) , Monday through Thursday from 8 a.m. to 5 p.m. PT, and Friday from 8 a.m. to 4 p.m. PT. 5
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