The employee handbook: Probably not the most enjoyable part of your job. It’s even less fun when a judge rules a policy unenforceable for some reason, forcing your company to hand over thousands of dollars to a disgruntled employee or former employee.
Here are 10 potential policy perils to avoid, courtesy of Mark Schickman and Cathleen Yonahara of Freeland Cooper & Foreman, LLP, in San Francisco:
No. 1: Avoid ‘legalese’ and jargon
Even lawyers shouldn’t write like lawyers. This is no time to impress your boss with “party of the first part”-type language. Employment policies should be written in clear, easily understandable language.
Avoid jargon from your industry. Remember, the most important reader of your handbook is the new employee, who is unlikely to be familiar with acronyms or jargon. If you must use industry acronyms, explain them when they’re first used or provide a definitions section. (Really, would a new employee know that “DUMB” stands for “Division of Urgent Matters and Business”?)
No. 2: Avoid ambiguity
The interpretation of a handbook shouldn’t be a multiple-choice affair. An anonymous, well-intentioned employer recently offered the following two sentences in its handbook regarding its break policy: “If your break is interrupted, you are not entitled to pay. If your break is interrupted, you will be paid for the break time.”
Run that by me again? Under California law, you must provide 10 minutes of net rest time for every four hours worked. If you fail to provide a rest period, you must pay the employee a premium payment of one hour of pay at the employee’s regular rate of compensation for each workday the rest period wasn’t provided.
Another employer stated in its dress code that employees were not allowed to wear “muffin tops.” When asked to describe a muffin top, the employer described it as being just like its namesake: “those shirts that don’t come down far enough to meet low-waisted pants and skin oozes over the top of the pants like a muffin.
The lesson? Choose your language carefully. Will everyone know what you’re talking about? To eliminate ambiguity and ensure clarity, proofread your handbook — then proofread it again.
No. 3: Don’t overdo it
Don’t attempt to make your policies so comprehensive that a court might assume they’re intended to cover every conceivable situation. Your handbook will be very long (and unread) and will leave you little flexibility. A common mistake is to draft very specific policies and then disregard them. Leave yourself flexibility in your policies and procedures.
For example, if your company conducts formal performance reviews every 12 to 16 months, don’t include a policy stating all performance reviews will be conducted “annually” or “every 12 months.” Allow some flexibility by stating that performance reviews will “typically” be conducted annually.
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No. 4: Don’t underdo it
An employee handbook is your opportunity to communicate critical information to employees about their legal rights under the Fair Labor Standards Act, the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, and other important terms and conditions of employment. A carefully crafted handbook can be an important part of your defense against alleged statutory violations. A poorly drafted handbook — one that omits explanations of employee rights or includes poor or incorrect explanations — might be used as “Exhibit A” against you.
No. 5: Make sure you don’t have ‘contracts to sign’
Remember the old adage, you have “places to go, people to meet, and contracts to sign”? The last thing you want is to be contractually bound by an employee handbook. An employee handbook is a tool to communicate with employees, not a contract. Besides, employment is presumed to be “at will” in California unless you, as the employer, do something to mess it up. Make sure you have a prominent disclaimer stating that the handbook is not a contract and making it clear that all employment with your company is at will.
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But wait a minute. What about things you want to contractually bind employees to, such as confidentiality agreements, intellectual property agreements, and the like? You want those to be binding. Those topics should be the subject of separate signed agreements. Check with your attorney for assistance.
Tomorrow, the rest of the perilous Top 10—plus a California-specific handbook resource you won’t want to be without
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