Employee Handbooks and Written Policies Will Reduce Your Risk of Liability
Many small business owners do not realize that their employee handbook and written policies are vital instruments to their survival right now. Businesses across the country have come to a screeching halt or have closed altogether due to the COVID-19 outbreak. Many business owners are doing everything possible to weather the storm and anxiously await life returning to normal. If you have not distributed written policies about emergency paid leave under the Families First Coronavirus Response Act (Act), then you are putting your business at risk. It only takes ONE employee to call the Department of Labor about your mistakes with #EmergencyPaidLeave. You NEVER want the hassle of a government agency investigating into your business.
Today we went live discussing how a poorly drafted handbook or no handbook at all exposes a business to unnecessary risk of liability. Click here to watch: Practical Legal Insights with Dana Ball-21 Employee Handbook, Written Policies, Necessary?
What is an Employee Handbook?
An employee handbook is a document that outlines your company’s mission, policies, and expectations. Give it to your employees on their first day of work and make it easily accessible. A well-written handbook will set forth your legal obligations to your employees and define their rights as employees. Here’s a Press Release where you can read more about #Employee Handbooks: Is Your Employee Handbook a Lawsuit Waiting To Happen?
What Purpose Does an Employee Handbook Serve?
Your handbook becomes the “go-to” manual for all company policies and procedures. For example, if a question or dispute arises on employee paid time off then a manager can say to the employee, “let’s look at what the handbooks states.” It becomes a safety net and ensures that all employees are treated fairly. With the new Act which expands paid leave to cover national pandemic emergencies with COVID-19, you want to make sure you are compliant with the new rules and your employees clearly understand their rights.
What are the Risks of Not Having an Employee Handbook?
It’s easy to put “writing an employee handbook” at the very bottom of your to-do list while reassuring yourself that no one reads them anyway and they don’t matter, right? Wrong! Not having a handbook, or having one that is poorly drafted, will expose your company to unnecessary risks of liability. You need to think of an employee handbook as a protection to your assets and move it to the top of your to-do list.
Handbooks are key to protecting your company against costly discrimination and favoritism claims. Without written policies on important issues such as attendance, harassment, paid leave, termination, and at-will employment, you expose your company to liability lawsuits. Employees need to know exactly how you will handle complaints to avoid fostering an atmosphere of noncompliance which opens the door for expensive employee lawsuits.
What are the Benefits to a Well-Drafted Employee Handbook?
First and foremost is peace of mind. Dana Ball, a Utah based small business attorney says, “The handbook needs to be a guideline for managers so they can answer employee questions consistently. Employees benefit from a well-written handbook by knowing what source they can turn to if they have questions regarding their employment.”
By spelling out the performance and the conduct expectations employees are reassured that your company takes their most valuable asset, the employee, seriously. Ball continues by saying, “If you find yourself in a lawsuit, one of the first things an attorney will ask you for is your employee handbook. You want to show that your handbook is compliant with the required laws of your state and specific to your business.”
With the new legislation passed due to COVID-19, don’t misunderstand and think you are compliant because your handbook already includes paid leave policies. No, your current paid leave policies are different than emergency paid leave for COVID-19. You MUST have separate written policies about emergency paid leave with an effective date of April 1, 2020, and an expiration date of December 31, 2020. In these unprecedented times, employers must take every step possible to protect their businesses. By incorporating the COVID-19 requirements you will minimize your risk of a potential lawsuit.
What Should Be Included in the Handbook?
Clearly state your expectations regarding paid time off, dress code, overtime, wages, harassment policies, payroll deductions, paid leave, drug testing, and benefits, just to name a few. Comprehensive and detailed expectations will offer your company greater protection from any ambiguities that could lead to a lawsuit.
You also need to include these three key elements:
- An at-will provision based on your state at will laws (if applicable to your state). Employees need to understand they are employed on an at-will basis and nothing in the handbook should be construed to create a contract of employment.
- Confirm your rights as an employer to modify the handbook. Employers have the right to revise, rescind, or modify the provisions and benefits in the handbook.
- An acknowledgment form stating the employee received the handbook, read it and agrees to comply with the provisions. An employee can’t claim ignorance of the rules if their signature is present. It may be beneficial to have them additionally sign off on COVID-19 emergency paid leave policies.
Remember, the internet is not an attorney. While it’s tempting to download a free employee handbook to save time, it will not be specific to your business or the laws that govern where you operate your business. This is the most common mistake small business owners make and it exposes them to great legal liability.
How Often Should the Handbook be Reviewed?
In an ever-changing society, now is the time (and at least yearly) to review your handbook and any other written policies. Local and state laws regarding workplace laws can change quickly and it’s important to make sure your handbook is compliant with current laws.
Another safety net against litigation that you can add as an employer is to implement training on each section of the handbook on a regular basis. Perhaps you should implement quarterly training where different managers take a section and teach it to the employees. Regularly reviewing and updating your employee handbook means better protection for your company.
Here’s a Press Release where you can read more about #Employee Handbooks: Is Your Employee Handbook a Lawsuit Waiting To Happen?
While these times are stressful, uncertain, and perhaps slow, now is not the time to let your business guard down. Dig out your employee handbook and blow the dust off of it. Make sure you distribute the necessary emergency paid leave policies to cover the COVID-19 legislation. Learn more about model emergency paid leave policies HERE. Remember, you do not have to navigate these stressful times alone. Reach out to a trusted advisor to help you. Dana Ball knows how to protect small business owners and can help you make your written policies compliant.