Many employers adopt a casual approach to their employee handbooks — which can quickly lead to lawsuits. A thought-out, well-crafted employee handbook is the best way to avoid this problem says attorney Elaina Smiley.
Smiley is a partner at the firm of Meyer, Unkovic & Scott, LLP, and works primarily in the area of employment law.
Employers should bear in mind that employee handbooks serve many purposes, she says:
- They help employees understand company philosophy.
- They inform employees about the conditions of their employment.
- They explain the benefits available to employees.
- They detail the policies and procedures that employees are expected to follow.
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Written and constructed well, employee handbooks can be a valuable resource for employees and supervisors alike. Poorly written employee handbooks, on the other hand, can lead employees to develop certain expectations contrary to the employer’s intent, or give employees rights that they wouldn’t otherwise have.
Many employee handbooks are riddled with mistakes that increase employer liability and make it harder for businesses to operate. Here are three of the biggest mistakes, according to Smiley:
Mistake #1: Inadvertently creating contractual rights to employment.
“At will” employment means a company can terminate an employee for any lawful reason without notice. The “at will” presumption, however, can be altered by a poorly drafted handbook that inadvertently guarantees employees certain rights.
For instance, companies can give employees contractual rights to employment when a policy states that an employee can only be terminated for “just cause,” or when a policy guarantees certain disciplinary procedures prior to termination.
Mistake #2: Inaccurately classifying employees as exempt.
Under the federal Fair Labor Standards Act and state law, employers are not required to pay exempt employees overtime pay. Nonexempt employees, on the other hand, are required by law to receive overtime compensation.
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A detailed analysis of an employee’s job duties is required to determine whether the employee is exempt or nonexempt. Employers often misclassify employees, and/or mistakenly assume that because an employee is paid on a salary basis, there is no requirement for overtime pay.
Poorly drafted handbook policies on employee classifications and overtime can be used against companies as evidence of a violation of the overtime rules and open the door to employee claims — including devastating class-action lawsuits involving large numbers of employees.
To avoid confusion, employers should have a seasoned and knowledgeable HR professional involved in determining exempt and nonexempt status before memorializing classification details in their employee handbooks.
Tomorrow, Smiley’s final handbooks mistake to avoid. We’ll also tell you about a brand-new resource that can make handbook drafting headaches a thing of the past.
Download your free copy of How To Survive an Employee Lawsuit: 10 Tips for Success today!
Yesterday , we discussed two of the big employee handbooks mistakes employers tend to make, according
Yesterday , we discussed two of the big employee handbooks mistakes employers tend to make, according