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Is a Company Handbook Really Necessary?

The number of employees a business has is the determining factor on whether the business should have a formal company handbook. As a rule of thumb, if your company has six employees a handbook is desirable. If there are fifteen or more employees, it is highly recommended.
At the very least, these policies should cover:

• Hours of work and attendance
• Holidays and vacations
• Leaves of absence
• Payroll deductions
• Benefits
• Discipline and
• Paydays

handbookA key reason for a handbook is to ensure consistency in matters of office policy. For example: A good, reliable employee asks for a few days off to deal with a serious family problem. You agree, and decide to pay him during his time away. Later, another employee who is problematic asks you for a similar allowance, and you decide that paid time off isn’t warranted. If the second employee belongs to a protected group, you’ve got a prima facie case of discrimination.

Other reasons for a handbook are (1) to be able to defend against a claim that you tolerated a hostile work environment, and (2) to defend an employee’s suit by showing that the employee committed some misconduct for which there was advance notice that he could be fired.

Experts recommend that your handbook cover four basic subject areas:

This is where you put any “mission statement” that your firm may have. Also be sure to set out sexual harassment policies, your commitment to equal opportunity employment, and other laws and policies as appropriate.
If you’re ever accused of discrimination of any kind, one of the things you’re going to be asked during the investigation is: ‘We want to see a copy of your EEO policy.’ And it’s certainly helpful if you have one.
Here’s where you define payday and payment methods, and cover related topics such as overtime, salary advances, raises, performance reviews, promotions and transfers. However, be careful to state only the policy itself. Don’t get drawn into the details of how it will be implemented. One thing that definitely shouldn’t be put in is supervisory procedures. For example, your handbook might include a strong policy statement against violence in the workplace. But it should not discuss the procedure to be used in case violence does occur. If this is included in the handbook, some employees may argue it was a contract, obliging you to do things in a certain way, and their rights were somehow violated because you didn’t fully follow the procedure.
This usually constitutes the bulk of the handbook. You might include policies on holidays, vacation time, sick days, personal days, and the Family and Medical Leave Act, where appropriate. Other topics you might discuss include medical and dental insurance, life insurance, section 125 plans, disability, retirement plans and workers’ compensation.
Here’s your chance to define what you expect from your employees. You may want to cover hours of work, attendance policies, meal times and breaks, dress codes, standards of conduct, personal use of telephones, e-mail and the Internet, parking, and workplace safety.

You must be extremely cautious in the language included in your handbook. Many courts are now looking at the handbook as a quasi-legal document. You need a handbook with the appropriate disclaimers so the courts won’t make it an implied or quasi-contract.
Your handbook should clearly state that it:

• supersedes any previous written or unwritten policies
• is not a contract, express or implied (it’s best to put this in boldface)
• does not alter the “at will” relationship or guarantee employment for any definite period of time
• cannot be modified except in writing by the employer (specify yourself, a partner, etc., as appropriate)
• may be unilaterally changed or revoked by the employer at any time
• is not all-inclusive, but offers general guidelines only
• is controlled by the terms of written insurance policies, as they concern employee benefits
• is only applicable to the positions covered by the handbook (i.e. you might choose to have one handbook for associates, another for support staff)

It doesn’t have to be very long at all. You need not try to address every possible contingency under the sun. There is as much danger in saying too much as too little. Manuals which are more than 50 pages long are probably replete with implied contracts.

Yes, but it’s best to hire an employment lawyer to draft your handbook. You should draft it yourself only if you can make the investment of time required to get the job done right. For example, consider a provision stating that employees shouldn’t engage in certain activities “during company time.” Most courts would reject this language as ambiguous. However, by changing the phrase to read, “during working time,” the policy becomes enforceable.

Once you’ve gone through all the trouble of preparing a handbook, you don’t want your employees to argue that they never knew it existed. When you give employees the handbook, get a written acknowledgement that they received, read and understood it. The receipt should also acknowledge your right to change or amend the handbook as needed. If an employee refuses to sign the acknowledgement, you can ask them to officially note on the acknowledgement sheet that they refused to sign it — and, presto, you’ve still got a legal acknowledgement.

“On-line” employee manuals, which are posted on a firm’s internal computer network rather than handed out in booklet form, offer some benefits. It allows you to easily revise the policies. But there are problems too. You don’t have a document the employee has signed acknowledging its receipt and acknowledging that they have read and understood it.