The Fine Print

LeFebvre Law's blog exploring legal issues related to the small business community, entrepreneurs, contractors, the construction industry, along with occasional pieces about futurism, the commercial space industry and space law, and other emergent technologies and novel legal fields. "Always read The Fine Print!"

The Fine Print

LeFebvre Law's blog exploring legal issues related to the small business community, entrepreneurs, contractors, the construction industry, along with occasional pieces about futurism, the commercial space industry and space law, and other emergent technologies and novel legal fields. "Always read The Fine Print!"

Employee Handbooks Overview

Employee Handbook

Employee Handbooks Overview

Employee Handbooks – An Overview

As a small business owner, you may want to consider creating an employee handbook if you have more than a few employees. This prudent decision allows for consistency in information among your workforce, clearly states the expectations you have of your employees (as well as what they might expect from you), and, of course, it gives you additional protection in the event an employee later challenges you in court.

In order to create an employee handbook, you should consider creating policies on a variety of topics. Your handbook should include, among other things, information on the normal working hours for full-time employees, rules for part-time employees, and how overtime compensation can be authorized for those entitled to it; information regarding pay and salaries, including any bonus program you might offer; and any policies on benefits, including sick pay, vacation pay, unpaid leave, and the like.

When going over benefits, you should also cover benefits provided by third party providers, such as health benefits, other insurance benefits, and retirement benefits, and refer the employees to the outside documents of those plans that explain the rules in greater detail.

It is also important that your employee handbook spells out in clear terms policies regarding drug and alcohol abuse, sexual harassment, attendance policies, and the disciplinary procedures. By having these policies clearly stated in the handbook, you can avoid confusion and will be confident that all of your employees are put on notice on these topics. You can also avoid the appearance of playing favorites by utilizing these policies in an even handed way, avoiding potential discrimination suits. Having a comprehensive sexual harassment policy and a clear disciplinary policy can be instrumental in avoiding costly litigation.

Another topic worth covering in your employee handbook is your company’s policy on electronic communications. In our increasingly digital world, companies find themselves in a position to go through their employees digital communications. It is important to state your company’s policies on use of email, the Internet, social networking sites, blogs, and the like. Because you may have to read employee communications (perhaps in the context of an investigation over an alleged harassing email from one employee to another), your policy must tell employees that their communications may be read and are not private. You may also want to create a written information security policy to go into greater depth on electronic communications policies, along with policies for handling sensitive personal information.

Some small business owners are hesitant to commit to an employee handbook. The primary objection they have to creating an employee handbook is that it limits their discretion, forcing them to commit to specifying certain policies and then enforcing them. Many small business people believe they would be better served with the flexibility of not having specific written policies. But a well written handbook protects an employer without limiting their discretion to deal with situations as the facts merit. Further, not having the policies in place is risky. Keep in mind that wrongful termination and discrimination lawsuits are very often based on claims that the employer acted arbitrarily or singled out an individual employee for unfair treatment inconsistent with the treatment of the other employees. By having a well-written handbook with thoughtful policies to fall back on, it is much harder for an employee to make that argument.

Some employers express concern about creating a handbook and failing to follow their own policies. This is not without merit. If an employer fails to adhere to their own written policies, they may be exposed to greater liability should they be sued by a former employee. For that reason, an employer must make sure to follow their own policies and ensure that their management are also adhering to the company’s policies.

Also keep in mind that you cannot write an employee handbook that will cover every possible situation. You should be clear about this in the handbook. Otherwise, you risk your employees claiming that any action you take beyond what is explicitly stated in the handbook is unfair or outside your reach as employer.

It is also important not to include unconditional promises in your handbook. An example of this might be language that states “If you follow these rules, you can rely on keeping your job.” The concern is that some courts (and employees, for that matter) interpret that sort of language as creating a binding obligation on the part of the employer. It could even be considered an employment contract! Instead, state that your company reserves the right to terminate employment for reasons not stated in the handbook or for no reason at all. After all, we do live in an “At Will Employment” country.

Also remember that an employee handbook needs to comply with all applicable federal, state and local law. The handbook should not conflict with any applicable law and should contain a clear statement that the company intends to comply with all applicable laws.

Of course, these tips are just the beginning of what should go in your employee handbook, and a handbook should be custom tailored to your particular business or industry. While it may be tempting to simply use a handbook you found on the internet (many exist), it may leave out crucial information or procedures unique to your business and could do more harm than good.

Remember, a well-drafted handbook is the paramount to a successful defense of unemployment, wrongful termination, or other legal claims. Winning such a claim may require proof that the terminated employee was on notice of a specific rule or policy and had been appropriately warned that violating that rule or policy would lead to disciplinary action up to and including termination. Not having an employee handbook can make defeating such a claim much more challenging.

Finally, keep in mind that it’s not enough simply to have an employee handbook – you also need to make sure the employees receive and read that handbook. This is usually best accomplished by distributing the handbooks to employees during their initial training period and having the employees sign an acknowledgment stating they received and read the handbook. Also, in the 21st Century, a handbook no longer needs to involve paper and can be published online. This has the added advantage of allowing the employer to update the policies regularly and gives the employer the ability to put employees on notice for any and all policy changes. This also allows for a digital paper trail when these updates are distributed to the work force via email.

If you have any questions, comments or concerns, please contact LeFebvre Law, PLLC. We would be happy to work with employers to create comprehensive employee handbooks or to answer any questions about them.


Tim LeFebvre, Esq.