Can Your Employee Handbook Protect You in Court?

It is shocking to discover how many companies are operating today with substandard employee handbooks on file. Or, even worse, no employee handbook at all!  While everyone realizes that running a business is hard, there is more to it than just being talented in your field. Owners, and their managers as well, must also be experts at dealing with complicated employee issues.


Owners generally aren’t prepared to tackle onboarding new hires, keeping experienced employees happy and staying compliant with federal labor laws. However, they must quickly become experts. To help, business owners need clear, concise and well-written policies inside an employee handbook as a solution to these problems.


In addition to providing a convenient reference for company policies, your handbook could protect you from potentially devastating lawsuits. If you don’t have an employee handbook, start one now. Your handbook lowers your legal risk and smooths out your day-to-day operations because vital information will be at your employee’s fingertips.


Barring local laws that might be in place where your business is located, an employee handbook is not likely a legal requirement. However, any business with more than a handful of employees would do itself a favor by providing the following information to all employees:


  1. Specific job descriptions

Every employee has a right to know exactly what his or her job entails to avoid confusion. This section might include the specific duties of each employee, normal working hours, as well as overtime policies (e.g., will some employees be expected to work mandatory overtime?).


  1. Compensation and benefits

Include your company’s information on insurance, bonuses and other compensation plans. Employees need to know what tax deductions (state and federal) and any voluntary deductions for benefit programs specific to your company, come out of their paychecks.


  1. Leave: paid and unpaid

Clearly state policies for time off, such as family medical leave or annual paid leave (APL). Employees should be aware of how quickly they will accrue APL, and also the procedure for requesting time off when desired. Remember that state and local law affects these policies, so update your handbook regularly to ensure compliance.


  1. Privacy policies

Many businesses handle personal client information protected by national privacy laws. For instance, the Health Insurance Portability and Accountability Act (HIPAA) is one such law that can lead to massive fines on your business for the misuse of information. Employees must be knowledgeable about the handling of privileged information, as well, so your handbook needs to spell it out implicitly.


  1. Employee contracts

Privacy is just as important when it comes to trade secrets and other proprietary information. Many businesses protect themselves by having employees sign non-disclosure agreements (NDAs) or other conflict-of-interest contracts. Protect your company from former staffers using information gained during employment against you in the future. The employee handbook should make clear exactly what each employee’s privacy obligations are.


  1. Anti-discrimination and harassment policies

Every employer must comply with all equal opportunity laws. Employee misconduct, harassment and discrimination leave you open to legal action so your handbook must include detailed information about intolerable conduct.


  1. General standards of conduct

If, as an employer, you want your workers to comply with a dress code, put it in the book. Formal, casual or somewhere in between, your employees will appreciate knowing what is expected of them. Also, set policies about breaks, personal phone calls, Internet usage and other downtime.


  1. Firing policies

Discipline and termination processes aren’t pleasant for anyone. Make sure you have clear policies in place and in your handbook. Even an at-will employment relationship (meaning that both employer and employee are free to terminate the relationship at any time), can lead to trouble. For example, a manager fires an employee on the spot for misconduct. However, the employee handbook states the employee should have first received a simple warning. Chances are you’ll see that employee back in your office very soon — this time with a lawyer! If your manager knew the employee handbook as well as the employee, you might have avoided this situation.


  1. Safety!!

Can there be too many exclamation points on this one? Honestly, almost any workplace is certain to have some sort of inherent hazard. Teach your employees how to handle all tasks safely, and make sure that everyone follows these standardized procedures. An avoidable workplace injury can easily devastate a business.

Remember, your employee handbook can only protect you from lawsuits if you actually stick to your policies. Make sure that management is familiar with the policies and that they are easily available to all employees. Do this, and you are sure to have the upper hand no matter what happens. It is well worth the effort! 

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