Expert answers on California employment policies

How should a small employer in California get started in creating an employee handbook?

Are floating holidays subject to use-it-or-lose it policies in California like sick days? Or must they be treated like vacation days and paid upon termination?

Should an employer create a standard telecommuting policy and add it to the employee handbook, or is it better to have individual employees signing a telecommuting agreement?

These questions and more were posed to Hilary Dinkelspiel and Natalja Fulton after a recent CER webinar. They lent their expertise in answering these questions. Read on for their answers.

Q. We are a small employer in Silicon Valley who needs to create an employee handbook. Any suggestions?

A. You may have a small business now, but it could be growing quickly. This is probably a situation where you want to be more flexible if you're going to have a changing size in workforce. If you're a small employer and you have over 5 employees, you can make sure that your staff is educated with respect to non-discrimination and FEHA (the Fair Employment and Housing Act).

If you are a small employer, you might not have a designated HR professional on-site. If so, it would be important to have good communication between your managers and employees—highlight your open-door policy. You don't want a situation where employees don't know who to talk to with concerns. With respect to handbooks, we do recommend them, even for small employers. Start with legal requirements and leave room to expand as the company grows.

Q. Is the employment relationship notice required for all employees or just hourly/non-exempt? Is it not required for exempt employees?

A. The Wage Theft Prevention Act requires that employers provide a written notice to non-exempt employees that outlines their pay details. Separately, with respect to an employee's classification as exempt or non-exempt, you should be advising this status to all employees just as a general best practice.

Q. Are floating holidays subject to use-it-or-lose it? Do these need to be paid upon termination of employment?

A. In California, as far as vacation is concerned, there is no use-it-or-lose-it policy. It's not permitted. So, whether or not floating holidays count as vacation days for this purpose depends on how they are treated. In general, holiday pay would not have to be treated as vacation, but if you have previously treated these as vacation or PTO and/or have paid out holiday pay upon termination in the past, it would behoove you to either be consistent or create a new policy and notify employees either way.

Another question is what happens with floating holidays at the end of the year when they're not taken—would they be paid in that case? If you want to do it a specific way, be clear. You want to avoid inconsistencies between employees, as this will set the stage for discrimination claims.

Q. We now have three exempt employees working remotely. What are your thoughts about adding a telecommuting policy to the handbook versus having those employees sign a telecommuting agreement?

A. It's up to the employer. If you do create some type of policy, make sure it's flexible and can adapt as you grow and add people who are telecommuting. Overall, it's a business decision, and depends on whether you want each employee to have separate agreements. Do you foresee having more telecommuting employees? This could become an issue of consistency if you add more in the future.

The above information is excerpted from the webinar "Employee Handbooks in California: Important Updates, Drafting Tips, and Enforcement Guidance." To register for a future webinar, visit CER webinars.

Attorney Hilary Dinkelspiel is an associate in the San Francisco office of Lewis Brisbois Bisgaard & Smith LLP. Her practice focuses primarily on labor and employment matters.

Attorney Natalja Fulton is an associate in the San Francisco office of Lewis Brisbois Bisgaard & Smith LLP. Her practice focuses on employment litigation and employment counseling.