Employee Handbook

Do you need to write an employee handbook? Are you concerned about distributing your company policies and personnel policies to your employees and staff? Creating a plain-English employee handbook is crucial. Some ask why company policies or employee handbooks?

You should have an employee handbook that explains your policies to employees. Many organizations, especially as they grow, also have a supervisory policy manual to ensure that their managers understand how to implement the company policies. As a practical matter, having employee handbooks or supervisory manuals may be especially prudent in today's legal climate where any inconsistent application of policy can result in a discrimination claim.

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1. Why are employee handbooks important?

Sound employee handbooks provide the framework within which an organization governs its employee-employer relations. An employee handbook or company procedures manual, particularly for larger organizations, guides both managers and employees as to what is expected. Furthermore, supervisors and managers are more likely to apply company employee policies consistently when they are clearly communicated in writing.

While it is true that written employee handbooks, like any record, can be used against you in a lawsuit, poorly drafted employee handbooks often become the main evidence presented when employees allege that the company policies were in fact a contract that the employer violated.

However, employee handbooks that are carefully written so as not to be contracts actually should protect against these claims and not be a problem. (See number 4, below.) In addition, carefully written policies can be used to illustrate your commitment to a positive work environment and nondiscriminatory employment practices. (See number 3, below.)

2. Are we required to have employee handbooks?

Although written policies and employee handbooks in general are not legally required, certain policies may be required, or at least needed, in helping you establish good faith compliance with federal and state law. For example, the Supreme Court has indicated that employers may protect themselves against liability for sexual harassment by having clearly articulated anti-harassment policies that include effective complaint procedures.

3. Does every organization need written employee handbooks?

As a general rule, every employer should have written employee handbooks, particularly if you have 15 or more employees. Federal discrimination laws (such as Title VII of the Civil Rights Act and the Americans with Disabilities Act) and most state discrimination laws cover employers with 15 or more employees.

Written policies and employee handbooks are a good starting point to show your commitment to nondiscriminatory employment practices, regardless of your size. For example, a performance review policy can show the job-related criteria used to evaluate employees and any safeguards used to ensure the process is conducted in a fair and objective manner.

Smaller employers should at least consider creating a employee handbook since it is likely you already have some policies in writing. For example, employment offer letters may explain vacation and sick leave accrual while other items, like a posted memo, may outline pay procedures. Thus, to ensure distribution to all employees, even the small employer is well advised to compile these memos into a handbook that is given to every employee.

4. Will we create a contract if we have written employee handbooks?

The simple act of putting your policies in writing should not create a binding contract if the policies are written as guidelines that explain generally or typically what your requirements are and how employees normally will be treated. However, you can fall into creating a contract by using language that conveys rigid rules that must be followed exactly as written in all circumstances.

Therefore, you should build flexibility into your wording and steer clear of any promises that could be interpreted as a contract. Your employee handbook should not, for example:

• State that the organization will "only" or "always" do something or "must" act in a particular way;
• Describe employees as "permanent";
• State that employees will be terminated only for "cause";
• Make promises of job security; or
• Use all-inclusive lists, such as in disciplinary procedures or work rules.

Instead, you should use terms such as "generally," "typically," "usually," and "may" so that managers have flexibility in interpreting and applying the policies in your employee handbook. In addition, you should specifically retain management's right to update, change unilaterally, and implement all policies in your employee handbook as it sees fit. Finally, you should include a strong "at-will" statement that clearly specifies that all employees (who do not have contracts or collective bargaining agreements specifying otherwise) may quit at any time and for any reason, or may be terminated at any time and for any reason, or no reason at all.

5. What is the difference between a supervisory policy manual and an employee handbook? Which should we have?

A supervisory policy manual generally is intended as a guide for managers and supervisors and contains information that they need to implement the organization's policies. Thus, a supervisory policy usually provides a general statement of policy followed by several comments that instruct managers how to apply that policy.

In contrast, an employee handbook is designed for broad distribution to all employees. It is typically intended to provide general information about the organization's practices, benefits, hours of work, pay policies, and work rules. It usually does not include information about supervisory procedures.

6. What policies should we include in our employee handbook?

In choosing policies to include in your employee handbook, you should consider the following points:

• The culture of your organization and its recurring issues or problems;
• Any memos on policy topics (such as vacation and holiday schedules) and past practices (i.e., what you have done in the past to address a particular employee relations issue); and
• The HR practices followed by other organizations in your industry (such as vacation lengths and leave allowances).

Most employers develop employee handbook policies on the following topics:

• At-will employment,
• Pay procedures,
• Benefits (including any paid vacation, sick leave, and holidays, and other forms of leave),
• Meal breaks and rest breaks,
• Personal conduct (work rules),
• Attendance and punctuality,
• Sexual and other forms of harassment,
• Equal employment opportunity,
• Disciplinary procedures,
• Termination.

In addition, many employers include policies on performance appraisals, smoking, safety procedures, appropriate dress and appearance, use of communications systems (including the proper use of telephones, computers, e-mail, and Internet access), and drug and alcohol use.

Remember, your employee policies and employee handbook should be considered dynamic, not static. You may need to add to them, revise them, and even delete them as your organization grows and changes.