We recently received the following question from a California Employer Advisor subscriber: We have a policy we’re planning to change. We told the affected employees that we will be handling the issue a particular way, but we didn’t explicitly tell them that the new practice is contrary to what is in the handbook, or that we intend to change the policy as it is currently stated in the handbook. Can we enforce the new version of the policy before we notify our employees of it?
Many employers face this challenge at some point. For an answer, we turned to Diana Gregory at Insperity:
Your question is an important one for many organizations in this fast-paced, constantly changing workplace environment. More and more frequently, policies that worked in the past need to be updated.
Your situation requires consideration of two main issues: the type of policy your organization is changing and how your policies are communicated and enforced.
The type of policy is important. Wage compensation policies of any type—for example, reimbursements, vacation/paid time off, and unearned but “promised” benefits (such as medical coverage)—are regulated by various state and federal laws that require special handling, including provisions such as a period of notice before a change.
Policies and practices that relate to other aspects of California or federal law, such as policies governing pregnancy disability leave, jury duty, and sexual harassment, also require careful treatment.
On the other hand, policies that are operational or internal-process oriented—for example, cell phone use or transfer procedures—don’t usually have to comply with laws or government regulations. However, depending on their overall impact on those affected, they may also merit careful treatment to avoid the possibility of discrimination or retaliation claims.
The second consideration, how an organization communicates a policy, is critical because this generally establishes the how, when, and who of the company’s right to change such policies. (This is assuming no union or other formal contracts have been established.)
An organization should always include a statement that it reserves the right to change the policy at any time, with or without notice (subject to applicable law), that such policy (or employee handbook) is not a contract of any kind, and that it does not affect the at-will status (if applicable) of the employment relationship.
In addition, once a policy has been communicated (preferably in writing and acknowledged in writing by employees), it is then truly established by practice and application. Therefore, the manner in which your organization has enforced any policy must be reviewed when making changes.
Your specific situation appears to be about changing a policy retroactively. You have a policy in place that you have not formally changed in your established employee handbook, but it seems that you have verbally communicated the policy change.
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It is unclear what type of policy this is or whether your organization has reserved the right to change it, with or without notice (depending on legal obligations or requirements). Consequently, I can offer only general possible options:
- Announce, distribute, and apply the new version of the policy, remembering that you may be taking a risk if it is a regulated area, especially if it has an unfavorable impact on those affected.
- Review application of the old policy and whom it impacted. If this analysis indicates other employees may come forward with concerns of unfair treatment if you implement a new policy, you may wish to reconsider enforcing the new policy until you have given ample notice of the change, or possibly even reconsider the new policy itself.
- Discuss the situation with the affected employees (and possibly with the previously affected employees) to determine if an interim solution might be preferable to possible morale or liability issues.
The bottom line is that most company policies can be changed. With clear communication, proper consideration of any required notice period, and evaluation of how the previous policy was applied, such changes need not cause undue morale and/or liability issues.
Tomorrow, we’ll offer some practical tips for communicating policy changes to your employees.
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