Articles/Publications

Employee Handbooks: Have you covered the basics?

By J. Jordan Scott

Many companies use an employee handbook or manual, which can be a useful management tool when properly utilized. An effective handbook sets forth company policies in plain English and covers every important company policy. Clarity is vital when implementing any kind of policy, and employees will benefit from understanding both what the company offers and what it expects in return. Although an employee handbook is recommended for most businesses, it is possible to do more harm than good, particularly when policies are poorly presented, or if the company sets forth a series of policies but fails to follow them.

There is no one-size-fits-all employee manual. Some manuals that just cover the basics may be ten to fifteen pages long, while some large corporations have manuals numbering into the hundreds of pages. In general, an employee handbook should serve as an employee resource, a convenient way for a company to communicate with its employees.

Most handbooks set forth employer commitments, which are useful to provide clarity to employees and as a partial defense to some employment-related claims. For example, employers should include policies relating to discrimination, sexual harassment, workplace bullying, drug and alcohol use, and violence, and then state how complaints are handled. This ensures that employees know that the company will not stand for any kind of dangerous and illegal conduct. Employees will feel safe in the workplace, and should a problem occur, the employer will be prepared to handle the problem and minimize the impact. For example, should an employer face a claim from an employee regarding sexual harassment, an anti-sexual harassment policy in a handbook will demonstrate that the employer has taken proactive steps to comply with the law and provide a safe environment, which can be helpful in resolving the claim with a minimal cost.

Employers and employees will also benefit from clearly stated internal policies and procedures related to the day-to-day operations of the company. For example, employees should be well aware of the company’s dress code, the company’s standard business hours, what sort of lunch breaks and other breaks are permitted, as well as how the company handles tardiness and unexcused absences. It is also wise to set forth how the company handles various kinds of leave: paid vacation is considered a “wage” in Massachusetts, and the Commonwealth recently enacted the Earned Sick Time law. There are also laws governing time off for holidays and jury duty. The various employment-related laws provide benefits and obligations to employers and employees, and so it is in everyone’s best interest to set forth how the company handles these matters in writing.

Today’s technology focused world has many traps for the unwary. Companies of all sizes have begun implementing policies related to the use of social media in (and sometimes outside of) the workplace, the use of company email, and the requirement to maintain the confidentiality of sensitive company information. Although risk can never be eliminated, an effective handbook can minimize the company’s exposure to lawsuits and costly government investigations.

An effective handbook can aid with both hiring and firing. On the hiring side, there is a real cost to bringing on a new employee, as that person must spend time learning the ways in which matters are handled by the company. A good handbook will ease the transition, minimizing the time that must be spent learning the company’s system and also acting as a resource for questions the employee has regarding company policy. On the firing side, an effective handbook will set forth grievance and termination procedures, so both the managers in charge of firing and the employees understand what is expected of them. A handbook also aids an employer in fighting off wrongful termination lawsuits by showing that a particular policy was in place, an employee was warned about violating such policy, and then the employee was ultimately terminated for violating the policy. Further, fired Massachusetts employees are entitled to unemployment assistance unless the employer can demonstrate one of a few factors, including the employee’s deliberate violation of a company policy. A handbook, read and signed by each employee, is evidence of the existence of company policies.

Any company with more than a handful of employees should consider developing an employee handbook. Consulting with a qualified employment attorney will ensure that the handbook complies with current law and does not expose the company to unnecessary risk.

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