United States: Employee Handbook: Lifesaver Or Nightmare?

Last Updated: July 18 2019
Article by Michelle I. Anderson

When done correctly, employee handbooks can be great tools for employers.

But often employers treat them like a meal simmering in a crockpot: set it and forget it. Creating a handbook, particularly for employers in multiple states, is a major undertaking.

Many employers do not give their employee handbooks the attention they need and deserve. Some cobble together a collection of policies borrowed from the internet or other businesses that may not only fail to reflect their actual business practices, but may also run afoul of state, federal or local laws.

Some businesses delegate the task of creating an employee handbook to someone with little or no experience in human resources, and the handbook turns into a glorified "how-to" manual for submitting expense reports and timesheets, with a few personnel policies thrown in.

Even when an employer puts the time and resources necessary into the creation of a good employee handbook, completion of a comprehensive handbook project often induces a sense of relief that quickly turns into complacency if the company does not have a plan to routinely revisit the handbook for periodic updates.

A well-written and up-to-date employee handbook can be a litigation lifesaver, but an out-of-date handbook can be an employer's nightmare. Recognizing and treating employee handbooks as important HR assets will pay off in the long run by providing consistency and guidance in day-to-day operations and legal protection in the event of a government agency action or lawsuit.

What Should an Employee Handbook Do?

Think of the employee handbook as a "best practices" guide that sets forth key expectations for employees, as well as any notices or policies that are required by law. It should explain the personnel practices about which there is to be no confusion, so they can be applied consistently and fairly. Put yourself in the shoes of your employees; what would you want to know about company policies, practices and expectations?

Examples of some key policies include equal employment opportunity and nondiscrimination; harassment; at-will employment; leaves of absence; reasonable accommodations for pregnancy or disability; drugs in the workplace/drug testing; an overview of company benefits (vacation, sick leave, holidays, health insurance, 401(k) plans, etc.); absenteeism and tardiness; safety rules; discipline; performance reviews; use of company email, voicemail, telephones and computers; an explanation of complaint-handling procedures; and an acknowledgment of receipt signed by the employee.

A well-written and up-to-date employee handbook can be a litigation lifesaver, but an out-of-date handbook can be an employer's nightmare.

Additionally, many states have written policy requirements that are dictated by the size of the employer's workforce in a particular state. Recently, there has also been a wave of paid sick leave laws being enacted by states and localities — many of which have written notice and policy requirements. Additionally, some states have written policy requirements for pregnancy accommodation, protection of social security numbers, family leave laws and more. It is incumbent upon the employer to keep track of these laws and the requirements that go with them.

Employers in multiple states need to be mindful that states do not all play by the same rules. Something that seems benign could land a company in hot water if the state law is not considered. For example, some states prohibit use-it-or-lose-it vacation policies, including California, while other states, such as Louisiana, require that all accrued vacation be paid out upon separation of employment, regardless of the reason. Many of these state laws have significant penalties associated with them that can be costly to businesses.

Further, agencies such as the National Labor Relations Board have also weighed in on whether certain language in an employee handbook may chill employee rights to engage in concerted and protected activity, particularly in nonunion workplaces.

In sum, an employee handbook should balance educating employees with legal requirements developed through several legal channels, including statutes, court opinions, agency interpretations of laws and implementing regulations.

How Often Should a Handbook Be Updated?

Ideally, an employee handbook should be reviewed and updated at least once a year. Employment laws change frequently, especially at the state level, and policies that were perfectly fine several years ago may be incomplete or problematic today.

For employers operating in multiple states, particularly those with active legislatures that tend to make changes to the laws effecting employers each session, a review every six months is recommended.

Can It Be Made Available Online?

The short answer is yes. The cost and logistics of distributing paper copies of handbooks has led a number of employers to make their employee handbook available electronically (e.g., on the company's intranet or through a third-party host site).

If your company opts for an online employee handbook, remind employees periodically that the information is available online and make sure that every employee has access to a company computer. If they don't, make hard copy handbooks available as a supplement.

In the end, maintaining your employee handbook is akin to getting an oil change for your car or rebalancing your retirement portfolio — a small but necessary step to keep your company on track. Consulting an employment lawyer who routinely prepares employee handbooks is strongly recommended.

Originally Publish by Workforce Magazine.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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