The Top 10 Reasons Your Organization Should Have an Employee Handbook

July 26, 2018Legal Alerts

You have heard it repeatedly—your organization needs an employee handbook. However, as an employer, maybe you only see the problems with having one. This article explains the top 10 reasons why you need an employee handbook and how a handbook helps your organization.

1. Protects you in the event of a harassment or discrimination lawsuit

This is one of the first things employment attorneys look for once litigation arises. Having appropriate policies in an employee handbook shows you took reasonable care to avoid unlawful behavior. If you are ever sued for retaliation, harassment or discrimination by a supervisor against an employee you may have an affirmative defense if you have an adequate policy. This policy should provide the employee an adequate avenue to make a report, including to whom to report. We recommend including an alternate person to report to if the person they are supposed to make a report to is the harassing party. If the employee fails to take advantage of this reporting procedure, you may have an affirmative defense if litigation arises. This affirmative defense may not exist absent a written reporting procedure.

Additionally, a signature page or receipt accompanying the handbook will demonstrate the employee had a chance to review the handbook and had a chance to ask any questions about it. This helps eliminate any ambiguity should litigation arise.

2. Makes clear what is expected of your employees

An employee handbook lays out what your company’s policies and procedures are—so employees cannot later claim they did not know what procedures to follow. For instance, a handbook can clearly set forth safety, timekeeping, attendance and reporting policies. This ensures proper procedures are followed, for instance, when an employee needs to ask for time off or report an injury.

3. Makes clear what activities are prohibited

The handbook should clearly state what activities are prohibited. This way an employee cannot later claim, “I did not know I could not do that.” It also ensures an employee is treated fairly and is prohibited from engaging in the same behavior. Fairness is the key to preventing employment litigation.

4. Acts as a guide for management

By laying out policies and procedures, you ensure your management is applying company policies properly and consistently and follows appropriate employment laws. Again, fairness and consistency are the keys to avoiding employment lawsuits against your organization. Further, by detailing activities prohibited under the law, you can provide notice to your management, which can prevent it from committing legal infractions.

5. Serves as a guide for the benefits that an employer offers to its employees

You are paying for these benefits, so why not show the employee what you are providing? This also helps you and your HR team avoid having to field unnecessary benefits questions and ensures employees know the benefits you are offering them.

6. Ensures compliance with federal, state, and local laws

One factor in employment litigation is whether there is evidence you prohibited the unlawful behavior in question. For instance, you should state, in writing, to all of your employees that your company prohibits discrimination on the basis of protected classes. Further, it is not always clear when an employee is requesting leave for a protected reason. Thus, you want to make sure the employee provides the information necessary to put you on notice the requested leave is for a protected reason, such as military or Family and Medical Leave Act leave.

Federal and state law regarding employment policies is constantly changing. For instance, the EEOC recently settled a case with Estee Lauder, which required Estee Lauder to change its paternity leave policy. In West Virginia, the Safer Workplaces Act permits an employer to randomly drug test but requires an employer have certain policies in place before performing such drug tests. Similarly, Ohio and West Virginia have had recent changes in their gun laws by permitting employees to keep handguns in their vehicles, which will likely require updates to most employers’ handbooks.

7. Prevents future wage and hour lawsuits

You should place the burden on the employee to update his or her personal information, such as phone number and address. That way you ensure you are sending employment documents to the correct address.

Further, a handbook should clearly specify whether an employee is to be paid vacation time upon cessation of employment. Ambiguity in doing so can lead to a wage lawsuit.

Finally, you will want to define who is an exempt or non-exempt employee under the Fair Labor Standards Act. This can help reduce any confusion for purposes of overtime requirements.

8. Increases employee satisfaction and morale

You should begin the handbook by emphasizing your mission and your excitement for having an employee join your workforce or continue employment with you. This helps affirm your company’s goals and will motivate a new or existing employee. You want to make your employee feel as though he or she is part of the organization and having a motivational introduction can contribute to that.

By prohibiting certain behaviors, you also protect other employees and make them feel safe. You do not want an employee to feel harassed or discriminated against. You also want an employee to feel he or she can file a report if he or she is uncomfortable at work. 

9. It does not bind the employer

You may be hesitant to issue an employee handbook because you are concerned it will tie your hands. This is not possible with a well-drafted employee handbook. Employee handbooks should, in fact, prominently emphasize employment is at all times at-will and that the handbook does not create a contract.  If such a disclaimer is present, there is generally no independent cause of action for failure to enforce the handbook.

10. It sets guidelines for social media use and public image

An employee handbook should also contain a lawful social media policy and public image policy. This ensures contacts from the media are directed to the proper person within your organization. Such policies also discourage an employee from speaking on behalf of the company when he or she is not authorized to do so. It also allows you to prohibit certain social media activities that could harm your company, to the extent authorized by law.

Having a handbook crafted for your organization is a small cost that can save you and your organization substantial money and time down the road.