Trash that Employee Handbook? Not So Fast
I recently read an interview that a national publication conducted with an entrepreneurial owner of a growing service company. The owner shared his business philosophies and, in particular, his views about empowering employees and fostering creativity. He also described his methods of developing personal accountability among employees. He proudly recalled a staff meeting when he ceremoniously took the company’s employee handbook and ripped it in two, and then tossed it in the nearest wastebasket – all to prove his point that personal accountability was a trait that transcended something as mundane as an employee handbook. Not surprisingly, the owner’s theatrics were met with thunderous applause by his staff.
Generally, I am someone who welcomes bold thinking, and I am a fan of most efforts to foster creativity. However, in this case, the owner’s theatrics went too far. Popular myths to the contrary notwithstanding, employee handbooks actually are both necessary and useful.
Why Handbooks Are Necessary
Employers need to have well-crafted, legally compliant handbooks for a variety of reasons, including the following.
- They must have a current and up to date Equal Employment Opportunity policy as well as an anti-harassment policy. Employers subject to Title VII that do not have comprehensive anti-harassment policies may not be able to advance certain defenses to claims of harassment.
- Employers with more than 50 employees must have a written Family and Medical Leave Policy.
- Employers need a handbook to adequately communicate the at-will nature of the employment relationship.
- Employers need a handbook to communicate their computer usage policy in order to disavow any expectation of privacy when employees use the organization’s electronic and computer systems.
- Employers need to convey at the inception of employment whether, and to what extent, unused leave will be paid upon the conclusion of employment. Employers that fail to do so may be liable for the accrued and unused leave that employees have used.
- Employers need to include in their handbook the so-called “safe harbor” language in the Fair Labor Standards Act that creates a possible defense to claims of mischaracterization of employees as non-exempt.
- As of October 1, 2013, Maryland employers with 15 or more employees must include in their handbooks information concerning an employee’s rights to reasonable accommodation and leave for a disability caused or contributed to by pregnancy in order to be compliant with Maryland’s new Reasonable Accommodations for Disabilities Due to Pregnancy Act.
- Perhaps most importantly, handbooks are necessary because the outside investigative agencies and courts expect employers to have them. Outside agencies investigating claims of discrimination and harassment routinely ask for copies of employers' most recent handbooks and immediately are suspicious if they do not exist or if they are outdated. Then, these same agencies and, later, courts, examine whether the employer followed its own policies and applied them consistently.
Why Handbooks Are Useful
Employee handbooks are useful as well. Among other things, properly crafted handbooks:
- Inform all employees that they will be subject to the same rules and procedures;
- Communicate the benefits provided to employees in a concise manner and in my experience often in a manner that features the employer’s efforts to compensate staff in a competitive matter;
- Convey to employees that they are part of something larger than themselves; and
- Tell the organization’s story, that is its history, its mission and its vision in a compelling manner.
Increasingly, employers are coming to understand that employee handbooks can be useful. For example, when defending wage hour claims handbooks may contain policies that (i) explain what employees should do if they believe that they have not been fully compensated and (ii) set forth when and under what circumstances employees may work overtime.
Looking Forward -- What Smart Employers And Their Business Advisors Should Do
Of course, employers do not need to have an employee handbooks that are as long as a city phone book or so boring that they will cure insomnia. That said, employee handbooks must be up to date and legally compliant, and they should be informative and dynamic. Smart chief executives will resist the temptation to toss employee handbooks in the closest wastebasket. After all, even EEOC investigators with sharp senses of humor will not be amused, nor will the employer’s insurance carrier. As for staff meeting theatrics, chief executives would be much better served by publicly acknowledging the contributions of their employees and rewarding top performers and contributors with gift certificates and other random acts of appreciation.
Marc Engel is an employment attorney and litigator at Lerch, Early & Brewer who regularly counsels clients on how to comply with state and federal employment statutes and wage hour laws. For more information on successful strategies for managing employees and preventing employment claims, contact Marc at (301) 657-0184 or firstname.lastname@example.org.