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Most common employee handbook mistakes

July 25, 2019

By Kristen Cifolelli, courtesy SBAM Approved Partner ASE

It’s hard to believe that summer is halfway over, and Labor Day is going to be here before you know it.  While the office is a little quieter due to heavier vacation schedules, this is a great time of year to tackle that handbook update project before things get busy again in the fall.

A well written employee handbook should be an introduction to the organizational culture and a clear and easy to understand road map for how to operate within the company.  The handbook should lay out expectations about everything from the employer’s dress code to employee benefits to employee conduct. As a result, every employee handbook is going to be unique to the company it represents. 

On the other hand, a poorly written handbook that is inconsistent or redundant or one that is missing key policies can do more harm than good to employers.  Below are the some of the most frequent problems encountered in employer handbooks:

Failing to keep it up to date – employment laws and trends in the workplace are constantly changing.  If there have been any recent discrimination or harassment issues in the employer’s workplace, key policies should be reviewed for clarity and possibly updated to include new procedures or requirements.   Employers should do a thorough review of their handbook annually or every few years at the least.

Believing that one size fits all – using sample policies as a starting point is a great way to get a handbook update project off the ground, but in too many instances employers use these templates without tailoring it to their organization.  Every organization has unique operational practices and issues related to their industry.  Employers should ensure their polices reflect this.

Failing to include required policies – a lot of policies in an employer handbook are discretionary and are intended to give guidance around items such as pay, benefits, appropriate behavior, and so forth.  But there are a number of policies that either are required or should be included in order to best ensure compliance with various employment laws.  Some of those policies include FMLA, anti-discrimination and anti-harassment, workers’ compensation, at-will, and disability accommodation.  

State specific policies include compliance with Michigan’s Social Security Number Privacy Act and the new Michigan’s Paid Medical Leave Act.

Being internally inconsistent – often times over the years, the handbook can become a hodge podge of policies that were updated at different times.  Make sure new or updated policies don’t conflict with older polices.  For example, policies around Michigan’s new Paid Medical Leave Act should coordinate with PTO policies, FMLA, and other leave policies.

Disregarding state law – most policy templates are written around compliance with federal law.  These policies don’t address state and local laws.  If the employer has offices in multiple states, they will need to have separate handbooks or state specific addendums.

Trying to make a handbook a contract – employer handbooks are meant to provide guidance and are not meant to create a contact.  This allows the employers to change policies and employment practices at any time for any reason.  Employers should have an affirmative statement in their handbook that states that nothing in the handbook is intended to create nor should be construed to constitute an employment contract between the organization and any one or all of their employees.  

Employers need to be careful that they don’t insert statements that are meant to be binding on employees.  Contracts such as confidentiality agreements, non-solicit, non-compete, and arbitration agreements should be created as a separate document executed by the employee outside of the handbook.

Policies not matching practices – on paper employers can have the best written employment policies, but if the employer is doing something completely different in practice the employer’s credibility is undermined and can open the employer to claims.  Employers need to determine which is the correct process to follow, the one on paper, in which case it needs to be enforced, or what is happening in practice in which case the policy needs to be changed and updated.

Failing to get an outside perspective – employers should have an outside expert review their handbook.  They can provide an outside 3rd party perspective as well as provide guidance on legal compliance and trending issues.  An outsider can more easily spot inconsistencies, ambiguities, and redundancies.

Failing to distribute the handbook – employer handbooks are useless unless they are distributed to employees and they have easy, ongoing access to them.  Handbooks should be provided to all new employees and any updates and revisions should be provided to current employees.  All employees should acknowledge either in writing on electronically that they have received and have access to the current version of the handbook.

Failing to train supervisors – supervisors must have a good understanding of the contents of the employee handbook.  Supervisors are often indicated as the first point of contact for employee questions.  It is difficult for supervisors to handle questions appropriately if they don’t understand the policies.  Employers should conduct regular supervisory training every couple of years and include key components of the employer handbook as part of that process.  It will help to ensure that supervisors use consistent treatment of employees which will reduce risk for employment claims.

A lot of time and effort goes into implementing a well-written employee handbook.  When it is done correctly, it will be easier to maintain and will be a valuable tool for years come.

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