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Guide To Creating Employing Handbooks

Small business owners may think they don't need an employee handbook. In a small company, it's easy for workers to explain the company policies to new employees. However, your employee handbook does more than tell new hires the pay rate and when your vacation days are. A good handbook describes the company's culture and vision.

Your employee manual also outlines federal and state laws that protect your workers' rights. An employee handbook should explain workers' compensation, workplace safety laws, and anti-discrimination laws. Your handbook fulfills your responsibilities as an employer and limits your liability in the event of future lawsuits.

Some regulations apply to all businesses, and you must tell your employees about them. Having them in your handbook means all workers follow the same rules and policies.

Legal Requirements for Your Handbook

Your employee handbook may restate or expand terms used in your employment contract, but it should include a clause stating it is not a contract. Your handbook explains your policies in general terms, but each employee needs their own contract.

Your handbook must include other important information depending on your state and business size.

  • Workers' compensation insurance: All states except Texas and the District of Columbia require businesses to carry worker's compensation insurance. Your handbook should contain information about reporting injuries and seeking medical treatment.
  • Anti-discrimination and anti-harassment laws: The Equal Employment Opportunity Commission (EEOC) requires all employers to affirm they follow applicable state and federal laws regarding discrimination and harassment in the workplace.
  • Medical leave policies: The Family and Medical Leave Act (FMLA) covers businesses with over 50 employees. Qualified employees must get up to 12 weeks of unpaid leave each year to care for family members or to recover from a serious medical condition. Some states have expanded FMLA coverage. The FMLA includes personal leaves of absence and parental leave.
  • Non-disclosure agreements: If your business has a non-disclosure or confidentiality agreement, human resources experts recommend placing it in your employee handbook and including it with the onboarding process. The earlier in the hiring process employees receive this notice, the better it protects you from legal action.

Safety and Health Requirements

All businesses, regardless of size and industry, must obey the health and safety guidelines set by the Occupational Safety and Health Administration (OSHA). Your state occupational safety office may have additional protections depending on the nature of hazards in your state. These regulations include safe storage of chemicals, securing objects in case of high winds or earthquakes, and use of personal protective equipment (PPE).

The EEOC issued special guidelines about sick days and working from home during the COVID-19 emergency. Although that emergency has eased, those guidelines still work for preventing the spread of flu and other diseases.

Workplace safety policies in the employee handbook ensure all workers will use the same practices.

Standards and Practices

Your handbook must detail your expectations for proper behavior on the job, whether you're a dive bar or a white-glove law office. Your employees must know what behavior is acceptable and what is not and what types of disciplinary action they can expect. If you expect to have a zero-tolerance policy, you must state it in your handbook and be sure all workers see it and understand it.

Most HR professionals and the EEOC advise against zero-tolerance policies except in cases of criminal behavior and well-defined sexual harassment. Consult an employment law attorney before enacting zero-tolerance policies.

Your behavior standards may include:

  • Appearance and dress codes: Your safety codes may cover some of these issues. For instance, construction jobs require hard hats and steel-toed boots on job sites. Food workers must wear gloves and hair nets while preparing food.
  • Personal behavior: You expect respect between coworkers and customers. At the same time, consider the nature of your workplace. Respectful behavior in a bar will differ from respectful behavior in a boardroom. If you wish to ban certain words or conduct, it must be clear that it is prohibited for all workers.
  • Online access: If your office uses the internet, you may be able to limit access to some sites. If not, your policy must state what sites employees must avoid. You must state this in your handbook if you intend to monitor employee traffic. In some states, the use of keystroke monitors and other devices is legally the same as a recording device, so consult your attorney before use. Online use includes social media, both during and after work hours.

Disciplinary Practices

Your handbook must explain your disciplinary policies. Bear in mind that even at-will employment is seldom at-will in the way most people imagine. Although technically an employer can terminate an employee for any reason, having a disciplinary record that shows a good reason for the termination protects you from legal action later.

Some things that fall under disciplinary practices include:

  • Attendance policies: Explain how many tardies or unexcused absences trigger disciplinary action. Explain whether the worker receives a verbal warning or written warning for the first violation.
  • Harassment policies: As noted above, you are responsible for explaining and disseminating non-discrimination and anti-harassment laws to your workers. You also need explicit policies about what is unacceptable behavior and will result in discipline and termination.
  • Workplace policies: If a worker violates one of your standards, describe what type of disciplinary action they will receive and its effect on their employment.
  • Performance reviews: You should have these at least annually. Give yourself enough time for the worker to give their own feedback about their performance and how they think they can improve.

Disciplinary policies up to and including termination cannot be discriminatory. That is, you may not base them on the employee's race, religion, gender, sexual orientation, or national origin. Clear policies and written records of the dates and times of policy violations can help avoid most claims of discrimination.

Telecommuting and Other Accommodations

The COVID emergency opened the business world's eyes to the benefits of remote work. A remote or hybrid work policy can be a full-time position. You can also offer it as an accommodation for workers with disabilities or extended sick leave. Explain these options in your handbook.

The policy should include:

  • Which positions are eligible for work-from-home
  • Alternatives for positions that are not eligible, such as flextime
  • The flexibility allowed when telecommuting, such as hours or weekends
  • The technology and equipment required, and who will provide it. For instance, will the employee use their own WiFi or computer, or will the employer want a VPN (virtual private network) installed
  • The production expectations for the remote worker

Remote and hybrid work has increased by more than 50% since 2020. It has been a boost to small businesses since it increases productivity and reduces overhead. With fewer employees in the office, small business owners can rent smaller spaces and lower their utility costs. Like other innovations from the pandemic, remote work also lets parents with sick kids stay home instead of bringing their flu to the office.

Benefits and Paid Time Off

All employees want to know about benefits and perks. Employee benefits range from pay and raises to soft benefits like pizza Fridays and fitness club memberships. Even a small business can offer employees some benefits. Your section can include things like:

  • Wages and overtime: The Fair Labor Standards Act (FLSA) requires equal pay for equal work. It also sets the federal minimum wage and overtime pay. Many states and some cities have minimum wages higher than the federal wage. Be sure your handbook conforms with your state and local policies.
  • Health insurance: Under the Affordable Care Act (ACA), businesses with more than 50 employees must offer affordable health insurance to at least 95% of their workers. Many states, such as California, have their own healthcare requirements.
  • Paid time off (PTO): If your business offers eligible employees PTO, vacation time, or other paid leave, let workers know what they must do to qualify and apply. If a worker must be full-time to qualify, explain what full-time means versus part-time.

What an Employee Handbook Is Not

An effective employee handbook describes your core values and mission statement. It defines your anti-discrimination policies and code of conduct. And it sets out the ideal work environment for your employees.

An employee handbook is not:

  • An employment contract: Your employee handbook should contain a disclaimer stating that the employment relationship is at-will, governed by the employee contract, or part of a collective bargaining agreement. Nothing in the handbook implies or guarantees employment.
  • Comprehensive or exclusive: Make it clear that your handbook's policies, conduct, and examples are representative, not definitive. Just because something is not expressly prohibited does not mean you allow it.
  • The final word: The handbook can change as needed. The handbook will change if laws, rules, or the company culture changes. Be sure your employees know that they will receive updated handbooks as needed. The handbook is not the final say on your company policy.

Finding an Employment Law Attorney

Designing an employee handbook takes knowledge of state and federal laws. If you need legal advice, consult an employment law attorney in your area when creating your employment policy and handbook.

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