Most employment relations experts agree that employee handbooks are an essential part, if not the foundation, of effective human resources (HR) management and positive employee relations. Handbooks can also play a critical role in demonstrating employment law compliance. Properly used, employee handbooks:
- Communicate policies and procedures.
- Play a key role in the orientation process for new employees.
- Serve as a valuable employee relations vehicle for educating current and prospective employees.
- Contribute to uniform and consistent application, interpretation, and enforcement of company policies.
- Protect against claims of improper employer conduct.
While carefully drafted employee handbooks can be an important part of employee relations media, handbooks that are unskillfully or improperly drafted can create organizational and legal headaches. Courts increasingly view employee handbooks as binding contracts subject to judicial enforcement. Accordingly, employers must carefully review every policy and procedure contained in a handbook to minimize potential contract claims and be prepared to update them periodically. The questions in this self-audit are designed to determine whether a handbook:
- Includes positive employee relations provisions that will improve employee morale and create a positive image of an organization.
- Educates employees regarding an organization’s origin, history, and employee relations philosophy.
- Provides a mechanism for two-way communications.
- Contains the necessary protective language to minimize the threat of litigation and/or employee complaints to governmental agencies.
Handbooks that are properly drafted and tailored to an organization’s needs can serve as the cornerstone of human resource management. However, improperly drafted, they can be a disruption that causes serious harm to the future well being of an organization. The questions that follow are designed to help an employer highlight the positive and negative features of an employee handbook.
We recently made some changes to our handbook policies regarding benefits offered to employees and have a disclaimer stating, “The Company reserves the exclusive right to change or terminate any benefits or related policy at any time in accordance with applicable law.” Are we required to have employees sign a new acknowledgement of the handbook because of these recent changes?
Yes, employees should be required to sign an acknowledgement noting that they are aware of any new policies or changes to existing policies.
Any new or changed policy should be provided to employees through the distribution of a new handbook accompanied by a brief memo directing the employees to the locations of the changes and requesting an updated acknowledgement signature. Without distributing and getting proof of receipt, the changed policies may be difficult to point to when correcting, disciplining, or terminating an employee. Most employers update their handbooks every one to two years. If there is a major change to an integral policy, that may be distributed separately and added to the handbook as an addendum until the next revision.
While not required, handbooks are a best practice in order to minimize risk. Clearly articulated and distributed handbooks can supplement a defense against many compliance issues such as, but not limited to, claims of sexual harassment, wrongful termination, and discrimination.
Handbooks are a general overview of policies and procedures. Key handbook policies include:
- Definitions of commonly used terms.
- Explanation of to whom the handbook and its policies apply.
- At-will employment policy.
- Disclaimer that handbook is not a contract and the right to change policies without notice.
- Antiharassment policy.
- Equal employment opportunity/discrimination/accommodation policies.
- Leave of absence and family and medical leave policy (if applicable).
- Maternity leave policy.
- Drug free workplace policy.
- Standards of conduct.
- Timekeeping and overtime.
- Paid time off/vacation/sick leave policies.
Lastly, because a handbook is not legally mandatory, it may contain whatever information an employer wishes to impart to its employees. In addition, handbooks are traditionally separate from benefits summaries and other health and welfare plan materials, although the handbook may discuss employee status (full time, part time, etc.) and may refer employees to benefit plan materials. Further, handbooks do not need to outline company job positions or titles; this can be maintained separately in the job descriptions.
As a best practice, we recommend reviewing new or modified policies with counsel prior to implementation.