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TO HAVE A HANDBOOK OR TO NOT HAVE A HANDBOOK – THAT IS
THE QUESTION

In the absence of written policies or an employee handbook, current practices become policy. Many of these practices can become discriminatory in application because of the lack of consistency. This creates greater exposure to workplace lawsuits than if the company had carefully drafted its written expectations in a handbook. At the same time, an imprecise or ambiguous manual is an ineffective tool and will cause much more trouble than it is worth. This Management Moxie provides our practical advice and observations to help you determine why and when a handbook is necessary.

DO I NEED AN EMPLOYEE HANDBOOK?

Employee handbooks offer employers the opportunity to implement personnel policies, outline employee benefits, and define work rules under a single document. Handbooks can also provide valuable guidance for supervisors to allow them to implement company policies in a consistent manner.

There is no legal requirement that employers prepare and distribute an employee handbook. At the same time, there are numerous federal, state and even local laws that require employers to consistently administer workplace rules. Handbooks provide a dependable way for employers to disseminate legally required policies such as equal employment opportunity, sexual harassment and family and medial leave policies.

EFFECTIVE EMPLOYEE HANDBOOKS

Over the years we have reviewed and written countless employee handbooks. A good employee handbook is not rocket science, but there are a few moving parts. An effective handbook is a statement of the policies of the business and how the business is to be conducted. It is one of the most important communication tools between your company and your employees. Not only does it set forth your expectations for your employees, but it also describes what your employees can expect from your company. The handbook should be one of the first formal communications that you will have with an employee after they are hired. Accordingly, we help our clients make sure the first impression is a good one. Similarly, in the event of a dispute or poor performance, the handbook will be the first place that an employee turns.

An effective employee handbook is a key ingredient in a healthy workplace and serves as the cornerstone for positive employee relations. Your employees deserve to know what is expected of then and what they can expect in return. By establishing well written policies, your company can expect that your management team will take the same course of action in similar circumstances.

PITFALLS TO AVOID One of the best ways to avoid handbook pitfalls is to verify that the current policy statements do not contain any errors. We frequently see errors in the area prohibiting harassment. Many harassment policies still refer to sexual harassment only and omit any reference to harassment based on other protective classes. Many harassment policies do not adequately address complaint procedures. A policy without a complaint procedure offers little protection to your company.

Oftentimes, Family and Medical Leave Act (FMLA) policies are overly broad. Employers with less than 50 employees are not required to provide FMLA leave. The FMLA policy should also have a rolling 12 month cycle. Time and again the handbook allows the employee to use all forms of paid leave before the FMLA leave begins, yet in Massachusetts such paid leave can be used concurrently with FMLA.

Maintaining the exempt status of employees under federal and state wage and hour laws is critical. Some handbook provisions contain policy statements that undermine the exempt status of employees. For example, a jury duty provision cannot require an exempt employee to return to work during the day that individuals serve jury duty.

Policies that are subject to frequent revision should not be included in the handbook. Two prime examples are reimbursement for mileage and the cost of medical benefits. It is better to include language within the handbook stating that the reimbursement for mileage will be at the rate allowed by the IRS and the contribution towards medical benefits will be determined on a regular basis.

We also find that provisions addressing confidentiality are often under inclusive. Employees should be advised that all information contained on hard drives is the property of the company and that employee hard drives will be accessed at the employer’s discretion. Employees should be advised that their email communications are not private and that email is not for personal use.

Another common mistake is the failure to update a current handbook. Reasons to update your employee handbook include new laws, new technology and various changes to how you conduct business. Companies are much better off not having a handbook than having one that is outdated.

WHEN TO HAVE AN EMPLOYEE HANDBOOK

We are often asked: “At what point does our company have sufficient employment liabilities to warrant an employee manual?” Unfortunately, we all understand that employment liability starts when you hire your first employee, but that does not justify a manual. In the absence of a manual, even the smallest employer should establish written policies addressing: at-will employment, hours of work and attendance, holidays, vacations, sick leave, if any, payroll deductions, and pay day.

With that said, even companies with just two employees must comply with: Massachusetts Wage and Hour Laws, the Federal Fair Labor Standards Act, the Massachusetts “Mini COBRA” law, just to name a few.

A more complete and more formal handbook is warranted when the company hires its fifth employee. It is at this point when more laws “kick in” including Massachusetts disability laws, the obligation in Massachusetts to have a policy that addresses the prohibition against sexual harassment, and the Massachusetts Maternity Leave Act, just to name a few.

There is no question that at fifty employees, an employee handbook is a must: Federal Civil Rights, Americans with Disabilities, Pregnancy Leave Acts, and more now apply to your workplace.

FINAL THOUGHT Written policies and handbooks do little good if they are poorly worded or not followed. The publication and consistent application of clear, rational and legally permissible employment policies reflecting an at-will employment relationship can be a tremendous advantage to an employer. This is true both during an employer’s day to day operations and in the event it becomes necessary to resolve an employment dispute.

How can we can help you?

Questions?
Contact info@neworkplacelaw.com or call 508-548-4888

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