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The Complete Payroll Blog

How Employee Handbooks Help You Avoid Legal Headaches

Posted by Complete Payroll | Jan 18, 2019 7:00:00 AM

How employee handbooks help you avoid legal headaches - Complete Payroll

There are around 100,000 Equal Employment Opportunity Commission (EEOC) discrimination charges filed each year. A single discrimination lawsuit can cost a company hundreds of thousands of dollars in defense expenses and settlement or jury awards. In addition to the monetary cost, there are the significant impacts to business operations due to a workforce that is distracted by the litigation and the internal upheaval it brings with it, a loss of employee morale and the damage of the employer’s reputation in the community. An up-to-date, compliant handbook is a viable first line of defense against huge litigation costs.

Ensures consistency and fairness

The implementation of clear, concise policies that employees understand and managers apply consistently can help employees feel like they are being treated fairly and can reduce the number of claims filed against the employer. If an employee or former employee does file a claim, a handbook can provide valuable documentation to demonstrate that the employer had equitable and compliant workplace policies in place.

Get help with your employee handbookAside from the threat of litigation, a thorough handbook is beneficial to both the organization as well as the newly hired employee as it clearly sets the tone for the expectations of that employee. Consistency is crucial when it comes to enforcing workplace guidelines and policies. Employers are best able to assure equality in treatment and expectations when communicating rules and standards of conduct in a uniform manner; this is where the employee handbook plays an imperative part of the equation. Implementing a company-wide handbook also allows the company to establish the policies that it wishes to incorporate into its operations, as opposed to managers or supervisors creating their own inconsistent, piece-meal policies for their employees.

What goes into an employee handbook?

Employers of all sizes should consider creating and enacting the policies within an employee handbook; even small employers are not immune to the threat of litigation. The basic goal of an employee handbook is to outline the policies and guidelines of the company. Reading and comprehending its contents is a vital part of the onboarding process when an employee is becoming acquainted with a new job and employer. In order to successfully facilitate this process, it is crucial to compose a document that is thorough, but that is not so voluminous that it becomes burdensome to read.

A well-written employee handbook will contain sections addressing the following criteria:

  • conduct and behavior;
  • leaves and benefits;
  • compensation and timekeeping;
  • hiring, discipline, and termination;
  • workplace safety and health;
  • at will employment; and
  • any policies specific to the organization’s values, mission, and goals.

When crafting a new employee handbook, it can be beneficial to partner with a Human Resources professional or legal counsel to ensure that the document complies with all state and federal laws. Once an employee handbook has been created, employers should review it on a regular basis to make determinations as to what internal policies should be added, updated or deleted altogether. When updating a handbook, having it quickly rechecked for compliance by a Human Resources professional or legal counsel is advised.

Once you've created the handbook...

The distribution to and acknowledgment of the handbook by employees is just as important as the actual compilation of the document.

There are several mediums by which this document may be disseminated. Traditionally, handbooks were printed and a copy was distributed to each employee or a ‘master’ hard copy was retained in a common workplace area. As technology advances and transactions occur over the computer have vastly increased in recent times, electronic dissemination is becoming an attractive option for many employers. For electronic distribution, some employers will choose to post the handbook to the employer’s intranet where it is readily accessible to all employees. Another option is to utilize a service which allows the company to electronically store the handbook, grant access to employees to read the document, gather electronic signatures of acknowledgment from employees, and store those acknowledgments of receipt. Whether the organization chooses to distribute hard copies or electronic versions of the employee handbook, the employer must validate that each employee has received and has had an opportunity to review and acknowledge receipt of the handbook.

Employees signing the handbook

While not required by law, employers should consider requiring employees to sign the employee handbook acknowledgment form upon hire and whenever the existing handbook is updated. The purpose of a signed acknowledgment is to demonstrate that the employee has not only received the handbook but also acknowledges the organization’s workplace policies. Depending on the language contained in the acknowledgment form, signing this document indicates that the employee understands the “at-will” statement and that the employee does not have an employment contract with the company.

An employer cannot force an employee to sign the handbook acknowledgment. However, if an employee refuses to confirm the receipt of this document in writing or via an electronic signature, an employer does have other options available. One choice would be to have the employee write, “I refuse to sign the acknowledgment form” in his or her own handwriting and include the date of this notation. Another route to take would entail a company representative writing, “the employee refused to sign the Employee Handbook Acknowledgment” and the company representative and another witness would then sign and date the document. Whether signed or refuted, a copy of the acknowledgment form should be placed into the employee’s physical or electronic (if applicable) personnel file.  A copy of the acknowledgment form should also be provided to the employee. If an employee complaint or lawsuit arises, the employer will possess documentation proving that the employee was asked to sign the acknowledgment form (whether or not they actually signed it). This trail of record keeping will generally be able to provide concrete evidence that the employee was aware of the handbook.

Don't have time to create an employee handbook?

Investing in the initial development or updating an existing employee handbook may seem like a daunting and time-consuming process for many employers. However, embarking on this task does not have to be intimidating. By using Complete Payroll's employee handbook service, your organization will obtain guidance that will ensure that the employer’s handbook and business practices are compliant with state and federal laws. Click the link below to learn more.

Get help with your employee handbook

Topics: Labor law, Human resources

Written by Complete Payroll

We do payroll, HR, timekeeping and more for employers all over the country from a small, rural town in Upstate New York. And we're constantly publishing articles and other resources to help business owners, HR managers or anyone that helps manage a workforce. Welcome to Payroll Country!

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The materials and information available at this website and included in this blog are for informational purposes only, are not intended for the purpose of providing legal advice, and may not be relied upon as legal advice.  The employees of Complete Payroll are not licensed attorneys. This information and all of the information contained on this website are provided pursuant to and in compliance with federal and state statutes. It does not encompass other regulations that may exist, including, but not limited to, local ordinances. Complete Payroll makes no representations as to the accuracy, completeness, currentness, suitability, or validity of the information on this website and does not adopt any information contained on this website as its own. All information is provided on an as-is basis.  Please consult an attorney to obtain advice with respect to any particular question or issue.