A common question asked by employers, particularly new and/or smaller companies, is whether they should create an employee handbook. Although companies are not legally required to have an employee handbook, there are several important reasons (legal and non-legal) why they should do so.
Communicate to Employees What is Expected of Them
Handbooks are useful to employees in several respects. They introduce new employees to the company’s history and culture, identify what makes the company unique in its industry, and highlight benefits provided to employees (and eligibility requirements for those benefits).
A well-written employee handbook will provide a clear description of the employer’s policies and employees’ responsibilities. Employees should have an understanding of what is expected of them and what they are (and are not) permitted to do. For example, if an employee has an unexpected absence, are there specific call-in procedures which must be followed? How much notice needs to be given to take vacation or paid time off? What are the policies regarding working off-the-clock or recording overtime? Many day-to-day questions raised by employees can be easily addressed in an employee handbook.
Ensure Consistent Enforcement
Workplace rules and policies are only effective if practiced and applied consistently. Inconsistent application of workplace rules can create the perception of unfair treatment and provide ammunition for discrimination claims by disgruntled employees (more on that below). A company’s failure to apply workplace rules consistently between men and women (or between members and non-members of other protected classes such as race, religion, sexual orientation, disability, etc.) can create the appearance that certain employees receive more favorable treatment. If the rules are made clearly in writing, they are more likely to be applied on a consistent basis.
Practically speaking, having the same set of rules for all employees will make life easier for business owners. When policies are clearly communicated in writing, there is less need to think about how a certain situation should be addressed – and less occasion for employees to claim ignorance of a particular rule. Of course, there will be times when no written policy squarely addresses a particular issue, but a written handbook will provide a guidepost to help employers both avoid and deal with many day-to-day issues.
It is equally important for managers and supervisors to understand what is expected of the employees they supervise. Although employers should always train managers and supervisors, the reality is that many managers do not receive the necessary training and are often required to deal with matters involving discrimination and harassment complaints and other disciplinary issues. A well-written employee handbook can serve as a guide when managers and supervisors answer questions or make decisions and ensure that their answers and actions are consistent with company policies and best practices.
Ensure Compliance with State, Federal and Local Laws
Every employer is subject to various state, federal or local laws. An employee handbook will communicate and identify the legal rights and obligations of employees. It will also remind managers and supervisors of those same rights, which can help avoid violations (incidental or not) of those laws. Many laws require employers to affirmatively provide notice of certain rights and obligations and an employee handbook makes it easy to organize and provide those legally required notices in one place.
Help Defend Against Employee Claims
Lawsuits and charges of discrimination are a fact of life for most employers. Even if a company does everything right, employees may feel they’ve been wronged and take legal action. A thorough employee handbook will contain equal opportunity, anti-discrimination and anti-harassment policies and establish reporting procedures for employees to follow should they feel they were subjected to discrimination or harassment. These policies help employers resolve complaints and take appropriate action before they rise to the level of a lawsuit or a charge of discrimination. If an employee does take legal action, these policies help demonstrate that the company exercised reasonable care and can provide a legal defense to future harassment claims if the employee fails to make a report. As mentioned above, having a clear set of rules will help employers apply rules consistently and fairly, which is helpful in defending claims of discriminatory treatment. Finally, obtaining a signed acknowledgement page from each employee will show that an employee knew about and agreed to follow the employer’s workplace rules.
While creating an employee handbook may seem like a daunting task, particularly for a new or small business that is carefully managing its costs, the benefits of doing so cannot be overstated. If done correctly, the time spent creating and distributing an employee handbook will be considerably less than the time and money spent dealing with issues which would have been avoided by having a handbook in the first place.