It is important for all companies to have a well-written and up-to-date employee handbook.
Employee handbooks inform employees of workplace policies, set expectations between employees and the company, provide direction to managers and supervisors, and serve as evidence (either good or bad) in employment-related legal actions.
Despite the importance of employee handbooks, some companies do not have an employee handbook. In this scenario, the company’s personnel policies may not be well-defined, memorialized in writing, or effectively communicated to employees, all of which create legal risks for the company. Other companies have employee handbooks but nonetheless fail to review and update their handbook as years pass. This often results in the employee handbook being inconsistent with the company’s current policies and procedures, or even worse, inconsistent with new laws and regulations.
A few examples quickly highlight how a good employee handbook can save your company time and money in the long run:
Sexual Harassment Lawsuit:
A current employee files a sexual harassment lawsuit against the company. The company does not have any written policies in place that prohibit harassment and set forth the process for employees to report harassment. The lack of a written policy weakens the company’s defenses to the employee’s harassment claim and increases the company’s risk of liability.
Vacation Pay Out Dispute:
A departing employee claims he should be paid for his accrued, but unused vacation time. The company does not have a written policy stating that vacation time is not paid out upon termination of employment. Resolution of this dispute would be easier if the company had a written policy which addressed vacation pay out. In the absence of a written policy, the company will spend more time and money fighting the employee’s claim.
Disclosure of Confidential Information:
A former employee is using and disclosing the company’s confidential information. By oversight, the employee was not required to sign a confidentiality agreement during her employment. If the company pursues legal action against the former employee, the company will have a stronger case if its employee handbook contains a confidentiality policy.
Medical Marijuana Use:
An employee tests positive for cannabis as part of a return to work drug test and is automatically terminated by the company pursuant to its zero-tolerance policy. The employee files a lawsuit against the company because the company’s substance abuse policy has not been revised to recognize new legal protections for medical marijuana users.
In short, having an up-to-date employee handbook is a relatively easy and inexpensive way to reduce your company’s risks and liabilities, all while improving your company’s management of employees and personnel issues. Make it your New Year’s Resolution to either prepare your company’s first employee handbook or to update an already existing employee handbook. Please contact an attorney at Metz Lewis to find out how we can help.
This post was written by Rachel Felton