California HR

Time to Get Your Handbook in Order

An updated employee handbook (or personnel policy manual) of policies that are both legally sound and followed consistently is an employer’s best proactive defense, says attorney Marc Jacuzzi.

Jacuzzi, a partner with Simpson, Garrity, Innes & Jacuzzi, PC, in South San Francisco, is a frequent speaker at ERI events and webinars.

Overcoming “the Big Buts”

The two handbook “buts” Jacuzzi frequently encounters are:
“But don’t policies restrict our flexibility?”
Jacuzzi responds that employers can counter this challenge by having a mechanism that allows them to alter the employee handbook to meet the changing needs of both the business and the employees. However, he adds, employers must give reasonable notice of handbook changes.

But if state law presumes an at-will employment relationship, why do I need a handbook?

You need a handbook for the following reasons, Jacuzzi says:

  • To enhance credibility of decisions based on policies by publishing the policies
  • To promote uniform application of policies and consistency of treatment
  • To reduce the risk of unlawful discrimination claims
  • To provide evidentiary support for compliance with employment laws
  • To reduce confusion about policies that can affect employee morale
  • To acquaint new employees with the business
  • To educate supervisors and managers
  • To provide guidance in resolving employee complaints
  • To reduce liability against implied contract terms other than employment at-will

Stay on top of all the major legal and regulatory changes in 2011 with ERI’s comprehensive, fully updated desk reference, the 2011 Guide to Employment Law for California Employers.

Common Handbook Pitfalls To Avoid

Jacuzzi sees the following mistakes made with handbooks:

  • Including “This handbook is not a contract” and other phraseology that could weaken the at-will statement
  • Including policies that are inconsistent with at-will employment: probationary periods, strict progressive discipline, grievance procedures
  • Internal inconsistencies within the handbook
  • Handbook does not reflect actual practice
  • Illegal terms (“Legal review is critical!” Jacuzzi notes.)
  • Failure to include an acknowledgment
  • Failure to update regularly (“The law changes annually; you must keep up,” Jacuzzi says.)

At-Will Protections

The basic at-will statement goes like this, Jacuzzi says:

“Either the employee or employer may terminate employee’s employment for any lawful reason, or for no reason, with or without advance notice, with or without cause, and at any time.”

There are two common claims people make to get around that, says Jacuzzi.

  • “But John Doe orally promised me long-term employment at my first review.”

That challenge is met by the handbook statement, “This at-will relationship can only be changed in writing signed by you and _______.”

  • “But in my interview, John Doe said this was boilerplate, and that I will have a five-year commitment.”

This challenge is countered by the following wording in the offer letter: “You agree by signing below that the Company has made no other promises other than what is outlined in this letter. It contains the entire offer the Company is making to you.”

Sign up for the 2011 Guide to Employment Law for California Employers and get a fully updated version sent to you automatically each year—it’s the easiest way to stay in compliance with all of your state and federal obligations.

In tomorrow’s CED, Jacuzzi’s checklist for employee handbooks, and an introduction to an invaluable reference manual you’ll turn to all year long.

Get your free copy of 20 Must-Have Employee Handbook Policies now!