Executives in small companies assume they don’t need to worry about details like employee handbooks. The handbooks seem like details that are only necessary for larger companies with many workers. This is a common misconception. An employee handbook is critical for companies of every size. It helps both the employer and the employees. Another misconception among small and large companies is that an employee handbook only needs to be created once. In reality, the document needs to evolve along with the company, laws and other issues that affect the company.
Lawsuits have proven that companies of all sizes need handbooks to protect themselves. Companies are vulnerable to lawsuits and employees have won large judgments in cases against company management. Employees have won cases that pertain to sexual harassment, violations of the Family and Medical Leave Act of 1993 and violations against federal and state regulations. Companies are also vulnerable to lawsuits from customers if employees violate laws such as disclosing personal information or sexually harass customers or vendors. The employee handbook should clearly outline the policies and procedures that management and employees must follow to stay in compliance with law. The handbook needs to be updated regularly to include changes in laws and business practices.
Creating an employee handbook does not have to be a complicated process but it must be thorough. You can find a wide variety of handbook templates and guidelines from reputable sources online. Some sources include the Society for Human Resources at shrm.org, the U.S. Small Business Association at sba.gov and the National Federation of Independent Business at nfib.com. These templates will help you understand all the topics you need to cover in the handbook. Even if you closely follow the template, you should always have your company’s legal counsel review the handbook.
There are many standard parts of an employee handbook. The document often contains some information about the company’s history, the mission statement and information about how employees can contribute to the company’s goals. The handbook should contain definitions of full-time and part-time employment, details regarding benefits, pay, vacations, employee savings and workplace rules. These rules typically pertain to on-the-job safety, handling on-the-job accidents, discipline and performance reviews. Your company should require employees to sign a form acknowledging that they have received the latest edition of the handbook. When the handbook is modified, the changes must be distributed to all employees and everyone must sign a form acknowledging that they have received the changes.
If there are special circumstances within your company or you are concerned about particular risks, consider hiring a human resources consultant or legal consultant. He or she can evaluate your situation and give you advice about what the handbook should include. You can also get guidance on the appropriate wording for the document. Even if you have a qualified human resources consultant, never skip the step of having legal counsel review the document. Although this involves extra costs, it’s worth in the long run. Attorneys can identify gaps in the document and help you avoid unclear or confusing language.
If your company has multiple locations, you will have to address changes in addendums to each state’s handbook. States make laws that affect employment and companies with multi-state locations must ensure that they are complaint with the laws for the locations in each state. The employee handbook in Nevada will look different than the Oregon employee handbook.
What does it mean when the employee handbook is an evolving document? This means that you don’t create the handbook once and consider it finished. Your business may change may grow, you may add locations, create new roles or revise policies such as vacation or sick time. Even if your company stays the same, you will still have to consider new laws and industry regulations. These need to be added to your employee handbook and you’ll need to distribute the updates to employees.
Technology changes quickly and often requires new policies within the company. Social media and data privacy are modern concerns that companies didn’t need to address in the past. Organizations have had to develop policies to ensure that employees are using these tools appropriately. State, local and federal laws change on an ongoing basis. You need to communicate these change to employees. If you don’t have policies that address these issues and regulations, your company could be vulnerable to lawsuits and penalties. These are some examples of why the handbook must constantly evolve.