If your company does not have an employee handbook, you may be putting your business at risk in a number of ways. Of course, there are legal risks associated with a lack of clear policies. For example, if you have failed to codify clear safety standards, you may find your company liable for resulting injuries. If you lack a clear reporting procedure for employees who feel that they are being harassed or threatened, you may be liable for any resulting harm to those employees, including constructive discharge.
In addition to providing legal protections, a clear, encompassing employee handbook can aid in the operation of your business. Having clearly-stated policies saves time, research and discussion among your managers when presented with a particular situation that is likely to arise multiple times. It puts your employees on notice as to what is expected of them, making it easier to enforce standards and to remove those employees who do not meet your requirements. A well-conceived employee handbook can even save time for your human resources department in addressing employee questions and concerns, and can streamline training within your organization.
However, if you do not fully understand all relevant laws or you do not use very clear, specific language in your employee handbook, you may see unintended consequences, including:
- Inadvertently-placed limitations on your ability to discipline or terminate employees for certain reasons
- Liability for rules or procedures that do not comply with state, federal or local law
- Liability for inadequate safety, sexual harassment or other procedures
When you are ready to create or update your company’s employee handbook, it is in your best interests to work with a business lawyer who is experienced in the creation of employee policies and employee handbooks. If you have already drafted an employee handbook, have it reviewed by a business attorney who is familiar with the relevant laws and regulations in your area.
Your Employee Handbook May Be Considered a Contract
Often, companies include procedures in their employee handbooks that are not required by law. For example, disciplinary procedures may be spelled out in the handbook, along with the number of points or infractions required for termination. Many states construe such provisions in an employee handbook as contractual, meaning that an employer who codifies such policies in a handbook and distributes that handbook to employees becomes bound by those policies and procedures.
Special Considerations for Multi-State Companies
The creation of a clear, comprehensive, effective and legally-compliant employee handbook can be a challenge under any circumstances. However, the challenge may be much greater when you are operating a business in multiple states. Different states may have different laws regarding employee issues such as working hours, overtime pay, minimum wage, break times and other matters. That may necessitate differing policies for different locations. Your employee handbook will have to account for those differences, or you may have to create different handbooks for your employees in different states to ensure compliance company-wide.
While some of these differences, such as minimum wage requirements, will be well known to your company leadership, some are not quite so obvious. For example, different states may provide different protections for whistleblowers or employees who have been sexually harassed or experienced other issues in the workplace. Medical leave requirements may differ, as some states provide employee protections or enforce minimums in excess of that required by federal law, or in connection with particular circumstances.
In this regard, a well-constructed employee handbook with a firm basis in state, federal and local law can provide a guide for your management as well as your employees.
Work with an Employment Lawyer to Create Your Employee Handbook
You know your business from end to end, but even with that knowledge you may not be aware of every issue that should be included in an employee handbook in order to adequately protect your company and advise your employees. In addition, few business owners or managers have the extensive legal knowledge required to create an employee handbook that is both comprehensive and fully compliant.
Our experienced business lawyers can help. We make it our business to understand your business, and to stay up-to-date on the laws and regulations of each jurisdiction that impacts our clients’ businesses. This not only allows us to assist in the formulation of an employee handbook that achieves your goals while complying with all applicable laws, but puts us in a position to advise your management team when changes are required.