Reasons To Write (Or Revise) Your Employee Handbook

It is not unusual for new or small businesses to begin operations and grow without having human resource policies defined in written form. This is not surprising as management in these organizations consciously try to operate their business without the "rules and restrictions" of larger organizations. However, as companies grow, the issues ultimately become more complex. Addressing these issues often results in distributing policy memos or letters on select topics as they come up, such as attendance control guidelines or benefits issues like holidays to be observed or eligibility and schedule of vacation.

The employee handbook is an essential tool for communicating workplace culture, benefits and employment policy information to employees. An employee handbook typically describes information about the company's employment practices, company benefits, equal opportunity commitments, attendance guidelines, pay practices, leave of absence procedures, safety issues, labor relations matters and disciplinary process for misconduct. A carefully prepared handbook or manual serves an important purpose by helping to orientate new employees, answer questions that arise during employment, prevent misunderstandings and guide employment actions to comply with applicable laws. An employee handbook requires that the author has an awareness of organizational policies or practices, a basic knowledge of a variety of employment laws and an ability to organize and write clearly.

Planning

The employee handbook should not be confused with a management policy and procedures guide which describes management procedures in more detail. An employee handbook should be summarized employment policy information that will be provided to all employees, written in a clear manner that helps employee understanding of company policies. It must be written to the level of comprehension of your employee population and must consider the level of language skills and degree of literacy. It is essential to use plain language and try to avoid "HR lingo" or buzzwords. The written document should be organized into sections or chapters and include a table of contents. Typical items covered are outlined below:

Employer information such as what we do, where we are located, our mission statement and other similar details to acquaint the reader with the organization. Certain items are now required of Ohio employers under the Ohio Fair Minimum Wage Amendment:

• Employer's Name
• Employer's Address
• Employer's Telephone Number
• Other Contact Information

Employment policies are explained to orientate the employee to critical issues in the employment relationship. Common topics may include a description of the employer's practices relating to equal opportunity, anti-harassment, orientation of new employees, employment category definitions that affect benefits eligibility, pay administration, performance management, employment records, disciplinary guidelines and issues related to separation of employment.

Attendance and working time topics should include an explanation of hours, meals breaks, timekeeping procedures, reporting absences and attendance control guidelines on related issues.

Leave of absence issues are also defined to clarify for employees the employer's practice for dealing with Family and Medical Leave (FMLA), jury service, personal leave, military leave, absence for voting, funeral or bereavement leave, and other leave issues that may be addressed under state or federal law. Smaller Companies not subject to FMLA may choose to define a medical leave policy to address medical absences. Other examples of leave categories may include sabbatical or educational leave, domestic violence leave, volunteer leave or emergency responder leave.

Benefits information may include a description of employer-provided benefits, such as paid holidays, vacations, sick pay, paid personal days, educational reimbursement, discounts on employer-provided products or services, or other benefits. Employees generally receive summary plan descriptions on group insurance benefits and retirement benefits, however it is sometimes beneficial to include a brief description of such benefits in the employee handbook.

Operational issues such as guidelines related to e-mail, internet use, computer use, privacy and search issues, drug or alcohol testing, dress and appearance, work garments, confidentiality, non-solicitation, business travel and reimbursement, or other topics of concern or unique to the organization. Recently the Smoke Free Ohio Law was passed which requires Ohio employers to prohibit smoking and post notices.

Safety, security or sanitation concerns will be important in many industries. Safety issues may cover topics such as accident reporting, safe work practices, protective equipment, use of equipment or vehicles, hazard communication, fire protection and emergency response. Security issues may describe facility access concerns, alarm systems and the like, and sanitation issues provide guidelines to employees in food preparation or handling, health care and certain manufacturing environments. Issues such as Ohio Concealed Carry Law require notices and policies if a business chooses to ban weapons in the workplace.

Reviewing and Revising

Employment issues are continually changing as every year new laws and emerging trends affect the workplace. Organizations are expected to stay on top of these issues and implement new employment policies addressing these changing trends. Employers that fail to adapt their policies and workplace practices may be subject to costly lessons after a problem has occurred. The employee handbook, once written and distributed, must be periodically reviewed and revised to reflect these new laws and trends.

Here are just a few reasons to update your company's employee handbook NOW, or to create a handbook if your company operates without one.

Protect Employment-at-Will Prerogatives.

One critical employment law issue affecting employee handbooks and policy manuals is referred to as employment at will. Employment at will is traditional common law perspective that an employee may seek work and quit at any time, and likewise, that the employer may hire and fire at any time for any reason or no reason.

Still courts in many jurisdictions have imposed certain limits to employment at will. As an example, various laws include a provision stating that an employee is protected from discrimination or retaliation for exercising rights under a particular law. An employer's discharge of an employee for exercise of rights under law would be contrary to public policy, and in many areas, such discharge would be prohibited, thus imposing a limitation to the employment-at-will concept. In many areas, the courts have held that an employee handbook or policy manual may be considered an implied contract if the manual contains certain promises relating to employment, tenure, disciplinary procedures or benefits. For these various reasons, the employer needs to stay abreast of employment-at-will limitations in all locations where the employer is located and update employee manuals to best protect the company.

Electronic Communication

Communication in the workplace has changed significantly in the past few years. Electronic communications such as e-mail and text messaging, through intranets and the Internet itself often predominate over other traditional communication media such as phones, memos and meetings.

While electronic media provides nearly instantaneous communication, it has brought new challenges.

E-mail and Internet abuse by employees presents a real liability to the employer when the employer's system is used to transmit sexual harassment or pornographic messages or images. Employer guidelines are needed to prevent and control employee "cyberslacking", or waste of time through nonwork use of e-mail and the Internet.

It is important to clarify whether personal or business-only communication is permitted on company electronic communication media. Employees should be cautioned to consider electronic communication as official business communication using proper grammar and tone and avoiding harassment or other discriminatory issues. Also, employees must be advised that systems are not private and that electronic communication is subject to surveillance by the employer. Reminders about password protection and other computer workstation security precautions may be appropriate as well.

Cell Phone Use

Cell phones can help or hinder workplace productivity. Camera and video phones create added concerns. Cell phones have been identified as a factor contributing to some vehicle accidents, and various jurisdictions have passed laws against use of handheld cell phones while driving.

To address this issue, the employer must balance the benefit of timely communication with the possible workplace distraction and safety hazard potential brought on by cell phone use. When the employer provides cell phones to employees for business communication, guidelines are needed to control costs and inappropriate use. It is recommended that the cell phone policy also address employee use of personal cell phones for non-work calling that may occur in the workplace. Employees receiving personal calls during work time cause lost productivity and workplace disruption. Limits must be set and communicated. As cell phones gain added features such as photo and video capability, text messaging, Internet connectivity and music download, the employer's cell phone policy must provide workplace conduct guidelines for employees.

Driver's License Checks

The past several years have seen major changes in the nature of insurance coverages provided to employers by insurance carriers. For example, many employers now find that their insurance carrier wants to run a driving record check of employee drivers and may refuse to cover those individuals with poor driving records. The employer faces significant potential liability if uninsured drivers operate a vehicle on the job.

Even employee driving record offenses that occurred off the job may now have serious job-related consequences. The company is likely to be caught in the middle of this practice, with responsibility to reassign or terminate an uninsured driver. This critical message should be communicated to job candidates as well as employees. The significance of a driving record search and the importance of the responsibility to maintain a good driving record during employment can be conveyed in the employee handbook.

Wage-Hour Changes

Recent revision to the Fair Labor Standards Act regulations now re-defines exempt job categories and permits wage deductions from salaried workers for certain absences. Policy revisions reflecting the revised definitions for exempt job categories should be addressed in a management policy manual, however the revision of the company's wage-hour policy reflecting the now permitted wage deductions from salaried workers for certain absences is a significant new policy change that can be communicated to employees in the revised employee handbook.

Employers are urged to carefully evaluate this portion of the regulations and to adapt policies to reflect the revised regulation. This should include a review of the exempt/nonexempt or salaried/hourly status of jobs in light of the new rules. An examination of job duties is recommended rather than mere reliance on job titles alone. In addition, an examination of certain personnel policies is also recommended. Policies related to absences, pay for time off and discipline may need revision to comply with or to take advantage of new features in the revised regulation.

Ohio recently passed the Ohio Fair Minimum Wage Amendment requiring certain records be kept on each employee for all hours and days worked - even if an exempt employee. The Amendment also requires employers to keep these records and other payroll related records throughout an employee's term of employment and for a minimum of three years after separation of employment.

Medical Privacy

The Health Insurance Portability and Accountability Act's (HIPPA) privacy and security rules affect many employers as well as the health care industry. Many employers are finding that their self-funded health plans or medical reimbursement plans make the company subject to the HIPAA privacy and security requirements. In those organizations that are covered entities, there is an obligation under the regulations to define privacy policies, implement privacy and security safeguards and communicate such procedures to employees.

HIPAA also affects organizations that are not covered entities. In particular, employer practices that involve employee health information are now impacted by the HIPAA rules limiting disclosure of health information. Health care providers and health plans must not disclose protected health information to employers except where there is a government-required health exam, such as workers' compensation, or if the employee has signed a health information disclosure authorization or pursuant to the employer certifying to a health plan that certain specified protections are in place.

Such rules directly impact employer administration of drug testing, work-related physical exams, medical leave policies, disability plans and attendance control procedures involving use of a physician's certification or report. The HR specialist needs to reevaluate these practices and revise procedures to accommodate the requirement for obtaining the employee's health disclosure authorization.

Where the employer is paying for a health care procedure such as a drug test, the employer may invoke disciplinary or other control actions to enforce its employment practice involving health information. HIPAA permits the provision of treatment (performing the specified test or medical exam) to be conditioned upon the employee signing a health disclosure authorization because the disclosure is solely for the purpose of creating protected health information for disclosure to a third party (the employer). The employer's policy can also state that the employee's refusal to sign a company-directed health disclosure authorization means that medical treatment will not be rendered, and failure or refusal to cooperate with the exam or test is grounds for the company to refuse or withdraw an offer of employment or to take corrective action such as discharge of an employee. A message of this significance should be detailed on the employer's authorization form and in the employee manual.

USERRA Notice Requirements

Implementing a portion of the Veterans Benefits Improvement Act of 2004, the U.S. Department of Labor issued new interpretive regulations and a workplace poster in 2005 that explain employee rights under the Uniformed Services Employment and Reemployment Rights Act (USERRA). USERRA applies to all employers, regardless of staff size, and covers nearly all employees including part-time and probationary individuals.

Employers should update their military leave policy to reflect USERRA requirements. In addition to displaying the USERRA poster, many employers detail their military leave policy in the employee handbook or personnel policy manual. With the deployment of many reserve units to duty in the Middle East, many employers have been dealing with the military leave issue.

The USERRA defines employment rights and protections for individuals who voluntarily or involuntarily leave an employment position to undertake military service. The pre-service employer must reemploy service members returning from a period of service in the uniformed services if the individual meets certain criteria.

In addition, service members and service applicants must not be subject to discrimination and retaliation. An individual who leaves employment for uniformed service also has the right to elect to continue health insurance for self and dependents for up to 24 months upon timely payment of specified insurance premiums. The returning service member is eligible for reemployment with length of service credited from date of hire for the purpose of determining benefits eligibility.

Workplace Privacy

Employment practices relating to workplace surveillance, searches and other workplace monitoring have become increasingly significant as many employers implement policies to promote workplace security and prevent loss. But often employer policies relating to security issues and to certain kinds of employee conduct have resulted in a backlash from employees who perceive such actions as a privacy invasion. In order to minimize the likelihood of a privacy invasion claim, care must be exercised to reduce employee privacy expectations.

When implementing an employment policy that may be seen by employees as an invasion of privacy on the job, it is important for the employer to identify a job-related purpose for a search or surveillance policy. The use of company-issued locks rather than permitting employees to bring locks for lockers or cabinets reduces a privacy expectation. Clearly communicate to employees that the employer reserves the right to conduct searches or surveillance and that the employer's actions are taken to protect the safety of employees and the security of workplace assets. In most areas, the courts view such actions as generally permissible, unless limited by a federal or state law or if the practice is handled in such an invasive manner that it may constitute a privacy invasion.

There are various legal limitations to an employer's policies on privacy issues. As an example, the Americans with Disabilities Act limits use of pre-employment and post-hire medical inquiries. HIPAA limits disclosure of protected health information. The Polygraph Protection Act limits use of polygraph exams in pre-employment screening and defines specific requirements for their use in post-hire investigations. A federal wire tap law prohibits monitoring of telephone conversations unless specific requirements are met. In addition, numerous state laws define certain privacy protection limits for employees, and these vary from state to state.

Companies are advised to review and revise their employee manuals to carefully address workplace privacy issues and take into consideration federal and state or local law, common law privacy protections, business needs, and balancing such employer needs with employee concerns.

Antiharassment Policies. Employers must ensure that the organization's antiharassment policy covers all applicable protected class categories identified by national, state and local law. Such policy statement should prohibit any form of harassment based on race, color, age, sex, religion, national origin, ancestry, marital status, physical or mental disability that can be reasonably accommodated, unfavorable discharge from military service or other category defined by state or local law.

In addition, employers should ensure that the company's antiharassment policy has been updated to reflect issues identified in recent court decisions relating to sexual harassment. Careful attention to this often misunderstood area is needed to guide proper on-the-job behavior, prevent workplace disruption and avoid costly claims.

The U.S. Equal Employment Opportunity Commission has issued regulations defining and prohibiting sexual and other forms of harassment. And not long ago, the U.S. Supreme Court issued several landmark decisions relating to workplace harassment further defining employer obligations and liabilities on this topic.

Employers are urged to review and revise their Company's antiharassment policy so that it reflects the issues in the regulation and the recent court decisions. When reviewing the Company's harassment policy, take care to ensure that it includes elements prohibiting sexual or other forms of harassment relating to supervisors and management, co-workers, visitors, vendors or customers, as well as same-sex harassment. In many jurisdictions, state or local law now includes prohibitions against harassment stemming from sexual preference or orientation issues.

It is important to define a policy strictly prohibiting harassment and provide training for supervisors and employees alike. The policy should advise employees where or how a complaint may be made within the company.

Management guidelines should instruct supervisors on how to respond when an incident is reported. In the event of a harassment complaint, management must take the complaint seriously. A prompt confidential investigation should be conducted by a human resource specialist or other manager. A timely investigation resulting in appropriate corrective action is essential to stop inappropriate behavior and to minimize the employer's liability. Protect confidentiality of the inquiry and assure the complainant that there will be no retaliation for a bona fide complaint.

Equipment Use and Return

As the workplace becomes increasingly technologically oriented, employers are providing more equipment for employee use on the job. The days of providing a few work uniforms and a couple of hand tools have evolved into employer-provided equipment such as costly laptop computers, cell phones, PDAs, vehicles and the computer terminals that likely are employees' key operating tools. These assets are expensive and must be used properly. Careless or inappropriate use can damage the equipment, cause unauthorized information disclosures or lead to other events creating significant liability to the employer. Notification to customers is required if information is lost or stolen. In addition, employees may use company equipment at their disposal for personal nonwork tasks conducted in the workplace or remove such items from the premises for personal use.

In order to protect the employer's assets and minimize liability of accidents or unauthorized use of equipment or information, the employer needs to define policies to guide proper use, care and return of company property.

Regarding personal use of computers, e-mail and Internet access, the courts have generally held that an employer has a reasonable prerogative to monitor employee use of electronic communication systems. Employer sanctions against an employee for improper use of such systems are proper, particularly when the employer has communicated an acceptable use policy to the employee.

Improper use of company automobiles or other vehicles by an employee can be very costly to the employer through higher insurance premiums or other direct legal claims. For this reason, many employers now advise employees that personal use of a company vehicle or other equipment is not permitted because such practices are not covered by the company's insurance plan.

Many employers try to be flexible and accommodate employee wishes. But if an employee becomes injured or causes damage during personal use of tools, equipment or machines belonging to the employer, costly liability questions may arise. Loss prevention specialists recommend that the employer define a policy guideline that limits or prohibits nonbusiness use of employer property. The challenge to each employer is to define a policy that reflects a reasonable balance between the needs of the business and employee interests.

In Summary

An employee handbook is an effective tool for communicating important information to employees. Since developing a positive employee relations climate is one of the core responsibilities of the human resource function, companies are encouraged to take seriously promoting the development, preparation and maintenance of the employee handbook.

This notice is intended to provide information generally and to identify general legal requirements. It is not intended as a form of, or as a substitute for, legal advice. No attorney-client relationship is created or implied by this notice.