Although most employers at least have an employment handbook, few companies treat it as a priority item. That’s a shame because a handbook presents a wonderful opportunity to communicate with your workforce about your organization’s philosophy, mission, and culture. Companies like Netflix and Nordstrom have demonstrated that handbooks can be effective without being dry and tedious legal documents. But make no mistake, your handbook does have legal ramifications.
A good handbook informs your employees about workplace rules and policies and sets expectations for performance and conduct, which prevents misunderstandings that may lead to disputes. Thoughtful and properly worded policies also may help you with your legal defense if a dispute does arise. On the other hand, a problematic or deficient handbook can hurt your cause more than it helps you. Here are the 10 biggest problems I see with employment handbooks.
What Not To Do
Failing to keep it up to date. I recently reviewed a handbook that contained a policy requiring smokeless ashtrays for employees who want to smoke in the office. I’m not sure in which decade somebody last reviewed the handbook, but I’m guessing hairstyles were a lot bigger then. Laws change. Policies and practices change. The very nature of your workforce and mission may change. Your handbook should reflect your current policies and be compliant with current law. Ideally, you should take a look at your handbook every couple of years.
Believing that one size fits all. I’ve seen a lot of handbooks that look like they’re basically a form downloaded from the Internet or borrowed from another source, such as someone’s former employer. I’m not necessarily knocking forms. You have to start somewhere, and handbooks do have a lot of common elements, so you don’t need to create each one as a unique work of art. But a handbook form that you borrow from somewhere else is almost never going to be exactly right for your situation.
How many employees you have, whether you’re a government contractor, whether you’re a public or private-sector employer, and whether you have a unionized workforce are all things to consider when you’re determining what to include in your handbook. Your particular industry may have workplace issues that don’t arise in other industries. For instance, manufacturers may want to address certain safety issues that wouldn’t be relevant for other employers. Banks may want to include cash-handling protocols. Hospitals may want to address vaccination requirements for employees. Professional groups may want to address licensure requirements.
In addition, your discretionary benefits and attendance policies should be tailored to reflect the practices that make sense for your workplace. You may have an insurance policy that requires certain information to be in your handbook. The list goes on and on. So, sure, start with a form if you like, but don’t think that it will get you all the way to where you need to be.
Failing to include required policies. A lot of what’s in a handbook is discretionary or, at most, recommended. But some policies are required. For instance, if you are covered by the Family and Medical Leave Act (FMLA) and you have a handbook, you have to include an FMLA policy in your handbook.
Being internally inconsistent. A lot of handbooks I’ve seen have a “Frankenstein” quality, meaning they seem to be sort of patched together from various revisions and addendums over the years. It’s great to update your handbook periodically. But when you do, read through the entire thing to make sure the updates are consistent with and don’t contradict, other policies that are already in the handbook. For instance, I’ve seen handbooks with an FMLA policy, an attendance policy, and a paid leave policy that all say different things about how employees should provide notice of absences.
Disregarding state law. Most “form” handbooks you get from the Internet focus on federal law requirements, which is great because compliance with federal law is important. But don’t forget about state and local laws, which may affect the wording of policies on topics ranging from weapons in the workplace, to drug testing, to jury duty, to parental leave—and much more. And if you have employees in more than one state, you may need to have separate versions of your handbook or at least state-specific addendums.
Trying to make a handbook a contract. A handbook is for guidance only. You don’t want your handbook to be a binding agreement, on your company or your employees. Your handbook should expressly state that it isn’t a contract and you may unilaterally revise it at any time. Unfortunately, I’ve seen situations in which employers correctly include such a disclaimer in their handbook but also include things that purport to be binding on employees, such as confidentiality, noncompete, or arbitration agreements. If you want to have a binding agreement with an employee—in other words, a document you can enforce posttermination, outside the employment relationship, through a court or an arbitrator—you should create a separate document that will be executed by the employee apart from the handbook.
Policies not matching practices. I’ve seen some good-looking handbook policies on topics ranging from moonlighting, to accrual of paid leave benefits, to progressive discipline. On paper, the policies are legally compliant and sound awesome. But the problem is, once I begin talking with the employer as we go over the handbook, I realize the company isn’t actually doing what the handbook states it will do. That’s a recipe for disaster.
The main purpose of your handbook is to inform your employees about your policies and procedures and set their expectations. If your practices don’t match your policies, neither purpose is satisfied, your credibility is undermined, and you open yourself up to employment claims.
The reasons an employer’s policies don’t match its practices may vary. Maybe you used to do things that way, but you’ve changed your methods or rules. That’s fine—but you need to change your policies to reflect what you’re actually doing. Or maybe you need to be doing things the way the handbook states you’ll do them for purposes of legal compliance, but some of your supervisors haven’t gotten the message. More on that in a minute.
Failing to get an outside perspective. In addition to periodically conducting an internal review, you should consider getting an outside expert to take a look at your handbook. Experts may provide guidance on legal compliance as well as trending topics that you haven’t previously addressed in your handbook. An outsider may also spot ambiguities or inconsistencies that you’ve failed to see because you’re too close to the verbiage you’ve been working with for years.
Failing to distribute the handbook. A handbook is worthless as a resource for employees unless they have access to it. And a handbook is worthless to mitigate your risks unless you can prove your employees have access to it. Be sure to distribute a revised or new edition of your handbook to all employees, not just to new employees during orientation. And make sure you require employees to acknowledge, in writing or electronically, that they have received or have access to the current version of your handbook.
Failing to train supervisors. Your supervisors should have a good working knowledge of the contents of your handbook. For one thing, your handbook probably repeatedly tells employees to go to their supervisors with questions about policies. That suggestion won’t work out so well if your supervisors have no clue what your policies say. Your handbook can also be a great tool to ensure consistent decision making and treatment of employees by supervisors, which reduces your risk for employment claims. You really need to conduct comprehensive supervisory training at least every couple of years, and reviewing your handbook should always be part of that training.
I hope this list will inspire some thoughts about handbook review. And of course, if you have questions about your handbook, it’s always best to consult an experienced employment attorney.
Kara Shea is a Partner in the Nashville office of Butler Snow, and editor of the Tennessee Employment Law Letter. She may be reached at email@example.com.