Employee Handbooks: 10 Mistakes That Will Cost You Money

Though it may not be your most beloved job function, developing and implementing effective HR policies are vital for running your business and setting the tone for the employees in your entire organization! Having clear and concise HR policies in place will help you avoid confusion as well. With their rules, expectations, and responsibilities clearly defined for them, employees will spend less time badgering you for answers!

ThinkstockPhotos-480315557Properly written policies can also keep your organization out of court, which is more useful than ever in today’s workplace environment of increased lawsuits and ever-changing legislation. To keep you and your company safe from damaging litigation, avoid these common mistakes in your employee handbook.

1. Not Including a Summary of the Most Important Policies
Employee handbooks should be a one-stop shop for employees to obtain a full overview of the behavior the employer expects. Employee handbooks should contain a summary of an employer’s most important policies — all of them.

2. Too Narrow Focus: Not Preserving Management Rights
Employers often write their policies and handbooks with the single goal of accurately explaining to employees each policy, benefit, and practice of the organization. While providing accurate explanations is important, there needs to be a second goal — ensuring policies are beneficial, not detrimental, to the employer’s business interests.

3. ThinkstockPhotos-455180555Not Balancing Employee Protected, Concerted Activity Against Prohibited Communications
Handbooks that haven’t been updated in some time need to include more exact provisions about employee collective action to ensure they aren’t deemed over-broad under emerging guidance from the NLRB with regard to protected Section 7 activity.

4. Using Boilerplate Language
It’s a mistake to blindly adopt a policy template. Based on organizational culture, industry, staff size, or potential union representation, there will be aspects of the template that don’t apply to or make good business sense for each employer.

ThinkstockPhotos-4779701855. Misclassification of Employees Through Oversimplification
The Fair Labor Standards Act (FLSA) requires that employees be properly classified (i.e., exempt or nonexempt from the Act). Some employee handbooks oversimplify how all the various positions within organization are classified — based upon title alone.

6. Impermissible Deductions From Pay
There are only a few reasons an employer may deduct money from an employee’s paycheck in the absence of employee consent. Other than deductions that are required by law, in general, deductions from pay must be voluntary and for employees’ benefit. In addition, with a few exceptions, employers can’t reduce exempt employees’ pay if they only work a portion of a day.

7. ThinkstockPhotos-80716534Entitlement Language for Payment of Unused Vacation Upon Termination
There’s no federal requirement for how unused vacation time must be treated when an employee terminates, but there may be requirements under state law. In general, vacation pay that’s earned or accrued is considered wages that must be paid at termination; unused vacation that’s described as a grant, not an entitlement, may not need to be cashed out.

8. Not Controlling Overtime
Overtime policies should be structured to limit unauthorized overtime. Employers should define the workweek for purposes of calculating overtime and specify that employees aren’t permitted to work overtime without prior supervisory approval.

9. Focusing on Unlawful Sexual Harassment; Excluding Other Prohibited Conduct
A harassment prevention policy is a must-have, helping employers defend claims when employees fail to follow the company’s internal processes for reporting potentially harassing behavior. It’s a legal mistake to limit harassment prevention policies to harassment based on sex and nothing else. Harassment complaints shouldn’t be required to be in writing.

10. Over- or Under-Acknowledging Policy Receipt
Employers can and should require that employees acknowledge receiving the handbook and should track the timing and receipt of signed documents.

… And an 11th: Missing Policies
Don’t lose sight of evolving areas of employment law that dictate having new or
revised policies.



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