Employee handbooks are a company's first opportunity to introduce staffers to the culture and expectations of their new workplace. Handbooks can also help employees to understand how the company expects them to engage and interact with coworkers. However, many handbooks forget an important truth: ugly as it may sound, the people who often read handbooks most carefully are lawyers hired by disgruntled or former employees – after a lawsuit has begun.
It is critical that employers maintain well-written handbooks that clearly enumerate not only the company's rules and benefits, but also announce important legal rights – and preserve the rights of the company. Here are the four most common mistakes regularly made in company handbooks:
• Be aware of changing legal requirements. Employers should update their handbooks on a regular basis to ensure they comply with new laws. For example, some handbooks have yet to incorporate amendments to the Federal Family and Medical Leave Act, which is now three years old. Additionally, companies must update their employee handbooks, or provide supplements to them, in order to address the laws of all of the states in which they operate.
• At-will employment. Handbooks need explicit statements outlining the employer's (and employee's) right to terminate employment at any time, with or without cause or notice. While most companies do, in fact, have such policies, many undermine the at-will relationship with probationary periods and progressive discipline policies outlined in their handbooks. These practices undermine an organization's ability to terminate the employment of its workers and can create additional rights for employees.
• Exempt/non-exempt classification. One of the most common legal actions brought by employees is based on their employers' failure to pay overtime or otherwise comply with wage and hour laws. Companies must ensure that the compensation sections of their handbooks properly address these issues and note that all employees will be classified either as exempt or non-exempt from federal and state overtime laws. Each policy should also have a “safe harbor provision” to insulate the company from possible additional damages for improper deductions from the salaries of exempt employees.
• Computer usage. Handbooks must make clear the company owns its computers and has the right to monitor all communications sent or received using its computer equipment. This should include a specific reference to the right to monitor personal e-mail (including e-mail to or from a Gmail or Hotmail account). Moreover, it is critical handbooks include the company's updated social media policy, allowing the organization to limit its employees' ability to make Internet posts about their employers (or their employers' clients) in appropriate circumstances.
In sum, an ounce of prevention is worth a pound of cure. To minimize future disputes, periodic updates by experienced legal council of a company's handbook are invaluable to both the company and its employees.
Michael Lasky is a senior partner at the law firm of Davis & Gilbert LLP, where he heads the PR practice group and co-chairs the litigation department. He can be reached at email@example.com.