Small Biz Mythbusters: Employee Handbooks

Mythbusters Employee Handbooks

Myth: My business is too small to need an employee handbook.

Some small business owners may feel their business is too small to benefit from an employee handbook. Even though companies are not required by law to create and distribute an employee handbook, it can be extremely helpful for both business owners and their staff to have one place where employees can access the company’s policies and procedures. Having such information in writing can also help demonstrate the company’s commitment to complying with applicable employment laws. Here are some key items business owners should have in its employee handbook.

At-Will Statement

An at-will statement states the employer or the employee can end the professional relationship at any time, for any reason, as long as the reason is a lawful one. Other than Montana, all U.S. states recognize the at-will employment relationship (employment laws differ by state; if a business has staffers located in multiple states, the handbook should reflect that).

A Description of Benefits

It’s a good idea to include a section on general benefits for employees. The handbook doesn’t need to go into great detail about benefits, and employers often refer employees to summary plan documents for more information. Federal- or state-mandated leave, as well as holidays, vacation and other time-off benefits, in particular, should be explained in a handbook. When explaining benefits, make sure to state that the company has the discretion to make changes as needed.

A handbook should also plainly state what constitutes full-time, part-time, exempt or nonexempt classifications, so employees are aware of their eligibility for certain benefits, which may include overtime pay.

Employees always want to know when they are getting paid, so payday policies should be included. If a company has a specific method of timekeeping to record employee work hours, this should also be included, along with attendance and punctuality policies.

A handbook should include policies on meal and break periods (including lactation breaks for new mothers). Check federal as well as applicable state law to ensure compliance.

Employee Safety and Code of Conduct

Employees should feel safe in all respects at work, and a handbook should feature a company’s safety and security policies. This means statements on its compliance with the Occupational Safety and Health Administration’s (OSHA) laws, where applicable, on issues including workplace injuries and health and environmental hazards.

Anti-harassment and discrimination policies are tremendously important to include; employees must know a complaint they make will be taken seriously. Consider including policies on standards of conduct, drug and alcohol use, confidentiality and potential related disciplinary action.

Equipment Policy

Employees could create unwanted distractions for their employers by using company equipment for non-company business. Staffers must understand there are no expectations of privacy when using company email, phones and servers, and that there may be grounds for termination if misuse is detected.

A Disclaimer

The disclaimer can also be a crucial element of any employee handbook. The disclaimer should state in no uncertain terms that the handbook is informational and not an employment contract.

Proof of Readership

Employers should ensure they have written acknowledgments from all employees that they have read and understood all policies included in the handbook. If employees refute to sign an acknowledgment, consider talking to them about their reasons for refusing to sign. Perhaps the employee misunderstood the implications of signing the document and just needs an explanation about the purpose of an acknowledgment. If the employee still refuses, the employer can write on the form that the employee was given the handbook for review but refused to sign the acknowledgment, and can then sign and date the acknowledgment.

These are just some of the more important topics a business owner should include in a comprehensive handbook. Consider having legal counsel review all content before the handbook is distributed.

This blog does not provide legal, financial, accounting, or tax advice. This blog provides practical information on the subject matter. The content on this blog is “as is” and carries no warranties. ADP does not warrant or guarantee the accuracy, reliability, and completeness of the content on this blog.
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