Even one discrimination lawsuit or employment claim can cost your organization (on average) $160,000 to defend through settlement. With well over 60,000 Equal Employment Opportunity Commission (EEOC) discrimination charges filed each year, it’s imperative for organizations to take protective measures to remain compliant and avoid hefty legal costs and reputational damage.
A comprehensive, up-to-date and legally compliant employee handbook can work as a major safeguard against litigation. An employee handbook not only communicates an organization’s mission, vision, and values, but also consolidates and articulates its key policies, expectations, disciplinary procedures, and the legal rights of employees (and the employer). Our recent article offers actionable tips for developing your first employee handbook. Here, we’ll explore how employee handbooks help you avoid legal headaches, and which common mistakes you should avoid to remain legally protected.
Key Sections of Employee Handbook
Beyond highlighting an organization’s core values, and promoting the robust benefits and perks available to employees, the employee handbook must also serve a set of practical functions for the employer and employee. Fundamentally, the employee handbook ensures that all employees have equal and transparent access to the same organizational guidance, especially as it relates to policies, procedures, and expectations. This includes articulating the consequences of knowingly violating company policies or failing to meet agreed-upon expectations.
With this in mind, your employee handbook should include the following sections to provide legal protections:
- Expectations & Guidelines Regarding Conduct and Behavior
- Procedures for Timekeeping and Compensation
- How and When Disciplinary Measures Are Used
- Policies Regarding At-Will Employment + Termination Policies
- Workplace Safety and Health Protocols
- Information Regarding Promotional Pathways & Employee Performance Review
Compliance-Related Mistakes to Avoid
In addition to including the sections we’ve just outlined, it’s also essential to avoid common compliance-related mistakes when drafting your first handbook (or updating an existing one). In each case, these issues are avoidable with the help of qualified HR experts who remain up-to-date on federal, state, and local policies that are applicable to your organization or industry.
- Missing Updates to Regulations and Laws – Each time an adjustment is made to federal or state laws that apply to your organization, you are obligated to update your employee handbook to reflect those changes. This can become more complicated when your organization must also comply with local or municipal laws that impact employment or workplace policies. Regardless, you should have a streamlined system in place to ensure that updates can be made swiftly and disseminated to your workforce for signed acknowledgement each time an update is made.
- Inaccurate Employee Classification – Ongoing changes to FLSA rules and standards could impact your organization’s classification of exempt and non-exempt employees based on salary thresholds and other factors. It’s essential to stay up-to-date on any policy changes that could impact your employees’ classification or compensation. Since overtime, hour, and wage complaints are a common source of employment claims/grievances, employers must ensure accurate classification.
- Failure to Outline Employee Rights – Organizations are obligated to provide information regarding employee rights in the workplace. Failing to do so can lead to serious legal liabilities. That’s why, in addition to including this information in detail in the employee handbook, your organization should have a labor law poster solution to communicate key employee rights digitally and in the physical workplace, as well.
- Lack of a Disclaimer – Employers should always include a disclaimer at the end of their employee handbook, stating that the handbook does not alter an employee’s at-will employment relationship and is not a contract of employment. The disclaimer should also emphasize that policies (and general procedural descriptions) included in the handbook are also not a contract, but serve as a general guide that permits managerial and organizational discretion.
- Failure to Collect Employee Signatures – Although employees are not legally obligated to provide signed acknowledgement that they’re received and reviewed an employee handbook, employers can fairly request a signature as confirmation that an employee has acquainted themselves with workplace policies. If an employee refuses, employers can legally request an employee statement of refusal to sign the acknowledgment form, which can offer legal protection in the event of a future claim.
Our related article, “Overlooked Employee Handbook Policies – Consider Adding or Updating,” offers additional suggestions on how to embed legal protections in your employee handbook.
Create a Legally Sound Employee Handbook with Cello HR
Cello HR can help you develop an employee handbook that keeps your organization legally protected while showcasing policies and benefits that support employee well-being. As part of this process, we offer HCM technology to streamline and integrate your hiring, onboarding, scheduling, payroll, time and attendance, and more, into a single consolidated platform. Along the way, our HR consulting and labor law poster printing services ensure that your organization remains strategically on track and up-to-date on all labor law changes that could affect your industry.
Ready to create an employee handbook that protects your organization and optimizes onboarding? Contact us today to start our collaboration.