5 Tips for a Better Employee Handbook

‘Tis the Season for silver bells, tinsel, holiday parties, cookies at the coffee station (I drop by at least three times a day to see what new delights have appeared since my last trip), and the Grinch (read one of last year’s holiday posts for more on the special place the Grinch holds in our house https://www.mwblawyers.com/employmentblog/?m=201211). But it is also the season for Employee Handbook revisions! I realize that only an employment lawyer would put an exclamation point after that sentence and admittedly, even my excitement is less than authentic. But we all should be excited about employee handbooks and here is why:

The often undervalued employee handbook will likely be the star of any audit or employment-based litigation your company faces. A properly drafted employee handbook will contain the policies you can rely upon in defense of a sexual harassment claim, a contract claim, or a wage claim. A poorly drafted employee handbook however, including one pieced together from policies you have found on the internet or have gotten from friends or consultants, can be the plaintiff’s or the government’s favorite piece of evidence to show that you weren’t paying your employees properly, didn’t give your employees proper notices, or failed to follow your own policy and thus likely discriminated.

Employee handbook revisions can be time-consuming and tedious, but they are necessary and well worth the effort and expense. I review and revise policies and handbooks for clients throughout the year, but the months of November and December are always particularly busy with this work because companies plan to roll out new policies or revised handbooks at the beginning of the new calendar year.

As I’ve been spending a lot of time over the last few weeks revising policies and handbooks, I thought I’d share 5 of my favorite tips for a better employee handbook. These are designed to apply to all of your policies, not just recommend a particular policy or approach to one problem.

As with most things in employment law, some seem obvious. But, I challenge you to review your handbooks with these tips in mind – I bet you can find room for improvement!

1. Your policies should reflect your practices. I often review handbooks with seemingly good policies, but upon a few questions to the employer, I can readily tell that the employer does not follow its well-crafted (and often obtained from the internet) policies. Having a great policy doesn’t do you any good if it doesn’t reflect how you operate. This is true of every policy in your handbook—from pay policies that set out payroll practices, work weeks, and start times to PTO request requirements and performance evaluation practices. If a disgruntled employee can show that you did not follow your own policy, the employee at least raises the suspicion that you did not do so for a reason and perhaps a discriminatory one. You never want your best argument to be, “Well, I know our policy says that, but we don’t do that with anyone.” As a general rule, I’d rather you not have a policy than have one you don’t follow. There are exceptions to this rule for legally required policies, but those are only a few. Read your policies and see if you actually follow them. If you don’t, decide if you should revise the policy or eliminate it all together.

2. Your policies should give you flexibility. Many employers make a lot of promises in their handbooks that appear definite: “You will receive an annual performance review on your anniversary date;” “We keep a personnel file on every employee that contains the following documentation;” “We will follow a progressive discipline policy”. However, the reality is that the employer is expressing its best intentions. I assure you that luck will have it that for the employee who sues you and requests his personnel file, you will have misplaced half of the documents listed as the contents for every personnel file. If your policies have “definite” language, you end up trying to explain why you didn’t follow your policy for the one employee who sues you—you are immediately on the defensive because if you don’t follow your own policy the implication is that you did something wrong. Instead, your policies should use flexible language, such as “Employees will typically receive a performance evaluation around the time of their anniversary date;” “We generally keep personnel files on our employees that contain pertinent documents related to their employment” or “The Company will determine which of the following disciplinary actions are appropriate based on the circumstances.” Don’t commit yourself to standards you may not be able to keep.

3. Determine the role you want your supervisors to play. Many policies in employee handbooks, almost by default, tell employees to consult with their supervisors about everything from reporting discrimination or harassment, to requesting an accommodation for a disability, to determining proper social media behavior. That may be appropriate, but it also may not be in the best interest of your company. For each policy consider whether the front-line supervisor should be making the decision or if human resources or higher level management should be involved for consistency.

4. Your handbook policies do not need to guide every level of management. Some handbook policies not only direct employees to consult their managers, but then direct the managers as to the actions the managers should take. If your managers do not follow the policy, then in litigation or an audit, you are again left explaining why the manager didn’t follow the policy and you are on the defensive. The better approach is to address the expectation for all employees in the handbook and then address proper management through training with your managers. If the concern that managers will not handle the situation appropriately is great enough, then perhaps the employees should be directed to higher level management (see number 3).

5. Disclaimers matter. Your handbook should state clearly in the beginning and on the acknowledgement page that the employee signs that: the handbook is not a contract; the policies contained therein are not contracts; no policies change the status of the employee as an employee at will; the policies are merely guidelines and the Company’s actions may vary from policy based upon the circumstances of any particular situation; and that the policies may be amended at any time in the sole discretion of the Company. South Carolina law requires that the disclaimer be in bold and underlined at the front of the handbook. While North Carolina has no specific requirement, I tend to follow South Carolina’s guidance and at least bold the disclaimer at the front.

With my lawyer hat on, I have seen how handbooks can be used against employers in litigation. These tips are designed for you to learn from unfortunate and difficult situations I’ve seen for other employers. However, with my human resources hat on, I also understand that policies must be crafted with employee morale and guidance in mind. Crafting a legally sound but effective employee handbook is a bit of an art. I encourage you to review your handbook (perhaps in front of the fire, with the holiday music playing and a cup of hot cocoa – no reason it has to be a miserable experience) with these tips in mind and to consult counsel as necessary to insure that your handbook is your star in litigation.

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