[Employee Issues] By the Book

Let’s face it — as an employer, you don’t have many "rights" left anymore. In fact, by now, most employers have learned that there’s a huge caveat to one of the few, but important, rights that they do have — the right to exercise "employment-at-will." In reality, while you may have the legal right to let an employee go at any time with or without notice, you must be able to prove through documentation that the reason for the separation (termination or layoff) was job-related and non-discriminatory. In other words, the burden of proof is on you, the employer — and if you cannot meet this burden of proof, government agencies like the Equal Employment Opportunity Commission (EEOC) will automatically assume you are guilty of violating one of their regulations.

DOCUMENTATION. So what’s an employer to do? Many times, even though a termination was indeed legitimate, necessary and non-discriminatory, a government agency has ruled to the contrary. Often what was lacking was some type of clear, convincing documentation like a written warning, policy, job description or handbook receipt. Worse yet are the cases with documentation — the kind that actually works against the employer — like outdated policies, poorly worded reprimands and employee handbooks or employer-drafted rules that violate employment regulations.

When was the last time you analyzed your company’s policies? If it has been a while, you may want to take a close, hard look at them. Or better yet — ask a professional to do so for you. Policies that are outdated, confusing, punitive or non-compliant could land you in a legal mine field. On the other hand, policies that are clearly worded and compliant and that are written in an easy-to-read style with a positive, direct tone are invaluable. They can save management time, promote consistency and fair treatment of employees and, most importantly, help meet the burden of proof. Everyday managers make a myriad of employment-related decisions — I don’t know how a business can operate without a well-written handbook.

WHAT TO INCLUDE. Most handbooks today are formatted in sections, with each section addressing critical employment policies and practices. A typical handbook is between 30 to 40 pages in length and because of unique differences among industries, companies, state regulations and laws that are based on company size and type, contrary to popular belief — one size does not fit all.

One of the biggest mistakes a company can make is implementing a handbook written by a fellow employer/friend from an entirely different business. Your handbook should be unique to your organization and should effectively capture and communicate your style, your culture and your business philosophy — not your buddy’s. Don’t get lazy with this one. There’s too much of a risk.

A properly written handbook should include the following sections and policies:

Introduction. This section explains the purpose of the document and usually includes a brief history of the organization, a welcome letter from the president or owner, your mission or business philosophy and a policy outlining the nature of the employment relationship including all of the necessary and appropriate disclaimers.

For example, you should explain that all employees are employed "at-will" (that is, you have the right to let employees go at any time, for any or no reason, with or without notice and, likewise, they have the right to leave your organization at any time, for any or no reason, with or without notice) and you should include a paragraph explaining that the handbook supercedes any and all previous related statements or documents. You’ll also want to ensure that you communicate to your employees that nothing in the handbook constitutes a contract and that you have the right to modify, change or revoke any or all of the contents at any time. Of course, there are other legal disclaimers that may be necessary to add depending on your company’s size and circumstances.

Employee Development. One of the first things a typical new employee wants to know is, "How do I advance at this company?" To help manage this expectation, you’ll want to include a section with policies related to internal growth and development including, for example, performance appraisals, internal and external training, educational assistance, advancement opportunities, performance and anniversary rewards and others.

Benefits. New employees can’t wait to read about their benefits so why bury them in the back of the book? We recommend that the benefits section of your handbook be placed right in the front of the manual. This section should include all of your benefits such as vacations, holidays, personal or sick time, medical leaves of absence (written carefully to comply with state and/or federal regulations), personal leaves, bereavement leaves, military leaves, jury duty leaves, health insurance, life insurance, short- or long-term disability insurance, investment benefits (401[k], profit sharing or others), section 125, medical savings accounts, workers’ compensation, social security and special company benefits such as discounts on products or services, flexible scheduling or employee referral bonuses.

Of course, you must ensure that all of your benefit programs comply with applicable laws and regulations. At the same time, you’ll want to ensure that your benefits are consistent with industry and market trends and that the policy describing each benefit is written clearly and concisely, but with enough detail to effectively use for managing employees.

Let’s take vacation as an example. Some states require employers to pay unused, accrued vacation time upon separation of employment (termination, resignation or layoff) and some do not. Your vacation policy should include a compliant provision explaining how accrued, unused vacation will be handled when an employee leaves the company. Additionally, your vacation policy is not complete without a clear explanation of the following: the amount of vacation time granted based on service, how an employee requests vacation time, whether vacation time can be taken in full or partial-day increments, how long in advance an employee must request vacation, how vacation pay is calculated, what happens when a holiday falls during a vacation, if vacation time can be used during a leave of absence, what happens when two employees request their vacations at the same time and other relevant information. These are all routine issues that arise when a vacation is granted and your policy should address each.

Payroll Policies. Your handbook should include a section that addresses issues related to pay such as hours of work, position classifications (full-time, part-time, temporary and/or seasonal definitions), pay classifications (salaried, hourly, commissioned, variable workweek and whether each is exempt or nonexempt from overtime) lunch and meal breaks, deductions from paychecks, expense reimbursements, overtime, pay periods and pay days, salary advances or loans and how final pay is handled.

Employment Policies and Procedures. This section of your manual should include all of the important policies related to your business philosophy and applicable state or federal employment regulations. Some examples of policies for this section include: policy promoting equal employment opportunities, policy against harassment, respectful workplace, alcohol and drug abuse, confidential information, outside work, conflicts of interest, code of conduct, employment of relatives or significant others, references, violence in the workplace, open-door policy, 90-day introductory period and grievance procedure.

Once again, you must ensure that these policies are written to comply with applicable employment regulations and to complement your culture.

Employee Responsibilities. This section should include all the policies related to general employee conduct. For example, you’ll likely want to define your company’s practices related to appropriate business attire, customer relations, smoking in the workplace (and in company vehicles), tardiness and absenteeism, company property, cleanliness of work areas, safety rules, solicitation, company vehicles, employee search policy, telephone use, computer use, ethical business behavior, corrective measures, inappropriate conduct, separation of employment, parking, visitors at work and personnel records/privacy.

Closing Words. In this final section, to bring the handbook to a close, you’ll want to share some final thoughts about the purpose and use of the manual. You should include an acknowledgment receipt that the employee can sign and date to acknowledge that he or she received the handbook, read it, had a chance to obtain answers to any questions and agrees to abide by all of the policies contained within.

Of course, depending on the size and type of business, your handbook may include some of the policies outlined above, all of them or even more of them. What’s important is that you include all of the policies that you need to effectively manage your business. Remember, your handbook can and should change over time. Generally speaking, your handbook should be reviewed annually and revised as needed.

HAVE HANDBOOK, WILL READ. Last, but not least, please…for the sake of employees everywhere…don’t implement a handbook that nobody wants to read! Unless your business is named "Internal Revenue Service," don’t settle for a handbook that reads like the IRS code — confusing jargon that’s poorly worded, threatening or punitive and completely lacking in any character whatsoever. Unfortunately, there are more of these types of handbooks than the alternative. It’s no wonder employees don’t want to read them and managers don’t want to use them! Don’t let this happen to you!

When it comes time to writing or revising your employee handbook, utilize the expertise of someone who can design a manual that is creative, interesting, fun-to-read, compliant and suitable for your culture. Make certain your policies are written in plain English and (where appropriate) lighten it up and use a little humor and references to your industry. After all, you’re not running a prison, right?

I assure you, if you implement a well-written, comprehensive handbook, it will save you time, help solve your employee problems, promote understanding among your workers, build morale, enhance compliance, improve the image of your organization and, of course, help you meet the burden of proof. Not bad for a few pieces of paper….

The author is president of Seawright & Associates Inc., a management consulting firm located in Winter Park,Fla. She can be reached at jseawright@giemedia.com or 407/645-2433.