In the realm of employment, an intentional approach to crafting policies and procedures serves as a cornerstone for fostering a fair, compliant, and productive workplace.

Implementing clear policies, structured procedures, and proactive management strategies not only cultivates a positive work environment, but also mitigates potential legal and financial risks. An employee handbook is one important element of this strategy and a vital document that delineates company policies, procedures, and expectations.

The Importance of a Comprehensive Employee Handbook

A well-crafted, up-to-date employee handbook helps establish workplace culture, promote consistency, and reduce legal risk, while also serving as a day-to-day reference point for employees and management. Legally, a handbook can assist employers in defending against claims by demonstrating the existence of clear policies.

Amit Bindra of The Prinz Law Firm emphasizes that companies like Netflix have utilized their handbooks to define corporate culture and values, making them instrumental tools for recruitment and retention.

A Tailored Approach

Employers must ensure that every policy aligns with applicable local, state, and federal laws. Max Barack, partner with the Garfinkel Group, emphasizes that businesses operating in multiple jurisdictions need to account for differences in laws at the city, county, state, and federal levels. For example, wage and leave policies can vary significantly between the City of Chicago, Cook County, and the rest of the state of Illinois.

Helen Bloch, who specializes in business and employment law, points out that a poorly written handbook can do more harm than good. For example, including policies that don’t apply to a business, such as Family and Medical Leave Act (FMLA) provisions for a company with fewer than 50 employees, can create unintended legal obligations.

Getting Started

Key Legal and Financial Terms Explained

Understanding key legal and financial terms in employment is essential prior to drafting any policies or procedures to be included in an employee handbook. A few important terms are explained below:

• At-Will Employment: In the United States, most employment relationships are ‘at-will,’ meaning either the employer or the employee can terminate the relationship at any time, for any reason, as long as it’s not illegal (e.g., based on discrimination). However, some states have exceptions to this doctrine.
• Family and Medical Leave Act (FMLA): A federal law that provides eligible employees with up to 12 weeks of unpaid leave per year for certain family and medical reasons, with continuation of group health insurance coverage. Employers with 50 or more employees are generally subject to FMLA.
• Non-Compete Agreements: A contractual clause that restricts an employee from working with competitors or starting a similar business within a specified time frame and geographic area after leaving a company. Some states, such as California, have strict limitations on non-compete agreements.

Essential Policies To Address

The following policy areas should be top of mind for employers as they begin to draft policies and procedures to be included in an employee handbook:

• Leave Policies: Specify how employees request time off, who they report to, and any legally required sick leave provisions.
• Expense Reimbursement: Outline procedures for submitting and approving business-related expenses.
• Progressive Discipline: Establish disciplinary guidelines while maintaining flexibility to address individual situations appropriately.
• Anti-Harassment and Discrimination Policies: Clearly define protected classes and establish reporting procedures.

Providing employees with a structured way to report concerns — especially serious ones like discrimination or harassment — is critical. A well-documented complaint process can also help protect businesses in the event of a legal claim. An anti-retaliation policy should accompany any open-door policy. Employees should feel safe bringing up legitimate concerns without fear of repercussions.

Max Barack notes that some employers worry an open-door policy could invite frivolous complaints but stresses that the absence of a clear reporting process often exacerbates legal exposure. A structured process ensures that employees know where to turn and that complaints are handled consistently.

Including independent contractors in an employment handbook requires caution. Misclassifying workers as contractors when they should be employees can lead to significant legal trouble. Instead of attempting to define classification on their own, employers should work with an attorney to ensure proper classification based on federal and state guidelines.

Charles Krugel warns that many businesses inadvertently misclassify workers, exposing themselves to costly litigation. An employee handbook that is not explicit about who and what it applies to could risk inadvertently subjecting independent contractors to employee policies.

Clarity Over Legalese

Clear and concise policies are the most effective. Employees need to understand the rules, and excessive legalese only creates confusion. Policies should be drafted in plain English so that everyone in the company can easily understand them.

Amit Bindra recounts a case where a corporate client questioned the validity of a contract simply because it was too easy to understand. The reality, he said, is that clear and concise language is more enforceable and practical in real-world applications.

For businesses with non-English-speaking employees, translating the handbook into several languages can be an essential part of this process. Some jurisdictions even require certain policies to be provided in multiple languages.

The Role of Training in Reinforcing Policies

A handbook is only effective if employees know what’s in it. Regular training sessions to reinforce policies are crucial. Ideally, training should be in person, but if that’s not possible, interactive online training can be a good alternative.

Max Barack emphasizes that companies should actively educate their employees, and not rely solely on written policies, to ensure they follow all policies and procedures. Training helps ensure compliance and demonstrates that the company takes its policies seriously.

Given that employment laws are dynamic, employers should provide refresher courses annually, especially when laws or policies change, and the handbook has been updated accordingly.

Final Thoughts

Keeping policies clear, compliant, and accessible will help businesses stay ahead of the curve in an ever-changing employment landscape. Having a well-structured employee handbook is an essential part of running a successful business.

However, simply having a handbook isn’t enough — it must be kept up to date, written in plain English, and properly communicated to employees. By taking an intentional approach to crafting their policies and procedures and formalizing them in an employee handbook, businesses can avoid costly legal pitfalls and create a more positive and productive workplace.

To learn more about this topic, view the webinar An Ounce of Prevention: Policies, Procedures and Proactivity. Any quoted remarks referenced in this article were made either during this webinar or shortly thereafter during post-webinar interviews with the panelists. Readers may also be interested in reading other articles about crucial employment considerations.

This article was originally published here.

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