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We see it every day and it scares us: employers operating without an employee handbook.

We get it. What business owner has time to undertake what seems like a huge, tedious project while operating a business? If you’re a small organization, an employee handbook can feel too corporate or even appear to stifle a workplace culture that thrives on creativity, flexibility and personal relationships. Is a handbook even worth the effort?

Yes. Yes. Yes! What we know as HR and compliance professionals is that every day you don’t have an employee handbook, your risks as an employer increase.

An employee handbook is the single most important tool employers have to protect themselves from employee claims and litigation and demonstrate compliance with federal and state laws.

An employee handbook prevents employee claims. It protects employers when claims do arise. Our team can tell you from decades of providing human resources to companies: when employee claims and lawsuits do arise, the very first thing we look at, without exception, is the employee handbook.

How Handbooks Help Employers

An employee handbook sets expectations, shares company policies and procedures, defines employees’ rights, and outlines an employer’s obligations under the law. The handbook is the foundation of human resources administration, and it is your most important vehicle for employee communication. Its purpose is to protect both the employer and the employee.

Many federal laws, such as the Family and Medical Leave Act, require employers to notify employees about the rights they have under these laws. A handbook, along with labor law posters, shows you have done this and also demonstrates your commitment to complying with these laws. Plus, if these policies are clearly set forth in the handbook, it’s less likely employees will take their complaints to the Department of Labor or Equal Employment Opportunity Commission.

When an employer does face an employee lawsuit or claim, the handbook is your first and most effective means of defense. In wrongful termination cases, for example, we turn first to a signed handbook acknowledgement form, which documents that the employee had an opportunity to review employer policies and address questions and concerns. The employee cannot say he or she didn’t know what the policies were.

An employee handbook is also an essential tool for managers. Managers are the ones on the front lines fielding employee questions, handling conduct and performance issues, and responding to disputes. A handbook is the best and easiest way to empower your managers to be good at managing their teams. If they do not have formalized policies and standards to guide them, HR issues usually end up on the desk of business owners and executives who don’t have time for them. It also means policies will be made on the fly and not enforced uniformly, opening the employer to more risk, including discrimination suits.

What Should Be in Your Handbook

First, there are policies you must have to be in compliance with state and federal laws. These include:

  • Equal employment opportunity policy
  • Anti-discrimination and anti-harassment policies
  • Disability accommodations policy
  • Religious accommodations policy
  • Anti-retaliation policy
  • FMLA policy
  • At-will statement based on your state’s laws

You also want to communicate company-specific policies to employees. These might be:

  • PTO and vacation
  • Leave policies
  • Attendance
  • Code of conduct
  • Progressive corrective action

There are a few areas where the law does not offer clear guidance, and employees can reduce their risk by explicitly defining their policies and expectations. These areas include:

  • Social media
  • Communications and data security
  • Privacy and confidentiality

Finally, many employers revised or added new policies in response to the coronavirus pandemic. These need to be added to your handbook and may include:

  • Infectious diseases policy/workplace health and safety policies. This should outline the specific actions you are taking to prevent the spread of viruses and diseases in your workplace. Read more about OSHA’s recommendations for creating a workplace coronavirus prevention program.
  • Work-from-home policies. If some or all employees are working from home, permanently or temporarily, you should add a telecommuting policy that defines rules and set expectations.
  • Workplace vaccination policy. Devise a clear vaccination policy that fits the needs of your workplace. Read the Anthros team’s answers to vaccination FAQs.

Handbook Best Practices

When developing your handbook, we recommend keeping in mind the following best practices to make your handbook effective:

  • Be as specific and clear as possible. Ambiguity opens the door to lawsuits.
  • Share the handbook and collect signatures on a handbook acknowledgement form as part of your new hire paperwork and orientation process.
  • Make it easily accessible to all employees. Share printed copies or post the handbook on your company intranet or employee portal where employees can access and view it at all times.
  • Train your managers in your handbook policies. Your managers will be responsible for implementing and enforcing policies and documenting conduct and performance issues. To do so efficiently and equitably, they need to know what’s in your handbook.
  • Enforce policies uniformly. The purpose of the handbook is to create standard policies that are applied and enforced across the board. If rules and policies are enforced for certain employees but not for others, this opens you to a discrimination suit.

Next Steps

We know building an employee handbook can be time-consuming but it is a cornerstone of employer liability protection. This may be a good time to call in outside experts. Outsourcing your handbook is a smart decision for small and mid-sized businesses who don’t have HR departments with broad knowledge of federal and state labor laws and HR best practices. An HR outsourcing company will know what policies you need to be compliant with federal and state law and also be able to create custom policies that fit your company’s specific needs.

An employee handbook is a safety net both for you and for your employees, so don’t wait to create one. Make it your priority today.

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