7 Key Elements of Employee Handbook Design

Also, Why Your Business Needs an Employee Handbook!

All employers, no matter the size of the business, should have an employee handbook. A good handbook communicates essential company policies to employees. First, it can serve as a legal defense against claims brought by an employee against the company or its managers.

Second, and perhaps more importantly, an employee handbook can help prevent claims from arising in the first place because a well written employee handbook can help create a better work environment. How? By providing guidance as to an employee’s rights and obligations and, thus, by helping employees and management avoid conflicts or to at least identify and resolve them early.

7 Essential Components of an Employee Handbook

Ideally, an employee handbook helps to set the tone of the workplace by ensuring its compliance with basic state and federal laws. Often an employee may violate a rule or fail to comply with a section in the handbook. If that same employee later files a lawsuit against the employer, the use of the handbook’s policy may be the basis for an employer either prevailing or losing its case.

Here are 7 components that every employee handbook should contain:

• Consistency: A carefully constructed employee handbook helps employers equitably apply company policies. Often, claims are filed against an employer when an employee asserts that a work policy was applied unfairly  or that illegal discrimination or retaliation was in play. When written policies are in place, these types of claims can be successfully defended against. They may even be avoided completely. Management must be trained to apply these policies in a consistent and fair manner.
• Expectations: An employee handbook should include a code of conduct. It should also include performance measures and disciplinary policies. Clear guidelines will help employees understand what is expected of them.They will also assist supervisors in defining procedures and enforcing rules. And, they establish what actions may lead to discipline or other negative consequences.
• Clocking In and Out Procedures: An employee handbook should lay out rules for clocking in and out by non-exempt employees. These rules will protect the employer against unpaid overtime claims. How? They allow employers to document rules prohibiting unauthorized overtime. Likewise, it can make clear that working outside of regular hours without authorization is not permissible. These documented procedures can assist employers when sued by an employee claiming that he or she worked before or after normal business hours and over 40 hours a week without receiving payment for overtime hours.
• Communication: An employee handbook should include policies that facilitate open lines of communication between individual employees. It should also include similar policies to encourage communication between employees and managers/supervisors.This will help reduce relationship issues between employees and between employees and management. These policies will also help to guide dispute resolution practices.This section is especially important. If an employer is presented with a lawsuit alleging unlawful harassment or retaliation. If the employee failed to complain to the employer prior to bringing the claim, it may show that that the employee had an avenue for complaining about workplace issues, but failed to utilize it. This may serve as evidence¹Aside from adverse actions such as terminations, other actions by the employer may be considered adverse actions that are found to be illegal or discriminatory. For example, a “constructive discharge,” may exist when an employer’s biased treatment of an employee becomes so intolerable that it causes her to resign. See Hill v. Winn-Dixie Stores, 934 F.2d 1518, 1527 (11th Cir. 1991). If the employee successfully establishes constructive discharge, the employer is liable for the same relief which would be available as if it had formally fired the employee. See Buckley v. Hospital Corporation of America, 758 F.2d 1525, 1530 (11th Cir. 1985). An employee can establish a prima facie case of constructive discharge when the employee shows that that the working conditions became so intolerable that a reasonable person in the employee’s position would have felt compelled to resign. Pennsylvania State Police v. Suders, 124 S. Ct. 2342, 2351 (2004). In assessing the reasonableness of the employee’s response to the discriminatory working conditions, courts generally require that the employee attempt to resolve the matter internally before resigning. See Garner v. Wal-Mart Stores, 807 F.2d 1536, 1539 (11th Cir. 1987). that the employer did not know about the alleged retaliation or harassment and that it could not have taken measures to investigate the allegations.
• Acknowledgment: An employee handbook should include an acknowledgment form. This form provides the  employer with a signed receipt from the employee confirming that he or she understands the policies and procedures of the company.
• Anti-Harassment Policy: An employee handbook should include procedures for employees to report issues regarding harassment, retaliation or discrimination. Having these procedures in place allows the employer to rapidly address any concerns. The inclusion and dissemination of anti-harassment policies provides a defense to employers when an employee claims illegal treatment on the part of another employee or a supervisor. If the alleged harasser is a co-worker, the employer will not be held liable for the alleged conduct unless the employer knew or should have known about it. But if the alleged harasser is a supervisor, the employer will be vicariously liable unless it can prove that  (1) the employer exercised reasonable care to prevent²See, e.g., Clark v. United Parcel Serv., 400 F.3d 341, 349 (6th Cir. 2005) (employer’s efforts to prevent harassment can include a comprehensive sexual harassment policy that should at least (1) require supervisors to report incidents of sexual harassment; (2) permit both informal and formal complaints of harassment to be made; (3) provide a mechanism for bypassing a harassing supervisor when making a complaint; and (4) provide for training regarding the policy). and promptly correct the alleged hostile environment, ³See, e.g., Collette v. Stein-Mart, Inc., 2005 U.S. App. LEXIS 2093 (6th Cir. 2005); Kennedy v. Wal-Mart Stores, Inc., 15 Fed. Appx. 755 (10th Cir. 2001) (unpublished) (plaintiff complained repeatedly to managers about the harasser’s behavior, yet, for 10 months, management did not fire him, demote him, move him, or move the plaintiff). and (2) the employee unreasonably failed to take advantage of the preventive or corrective opportunities provided by the employer; or the employee otherwise unreasonably failed to avoid the harm.⁴Faragher v. City of Boca Raton, 524 U.S. 775 (1998); Burlington Indus. v. Ellerth, 524 U.S. 742 (1998); see e.g., Walton v. Johnson & Johnson Serv., Inc., 347 F.3d 1272 (11th Cir. 2003) (summary judgment for employer affirmed when, after initial sexual advances by her supervisor, employee both failed to follow the harassment policy and returned to supervisor’s apartment on three occasions, drank alcohol, agreed to a massage, and was assaulted again by him. The employer reacted by terminating the supervisor after receiving complaint three months later.); cf. Hardy v. Univ. of Ill. at Chicago, 328 F.3d 361 (7th Cir. 2003) (six-week delay in reporting sexual harassment by supervisor reasonable when plaintiff-employee tried to first work it out and talk with her supervisor before reporting); see also Barrett v. Applied Radiant Energy Corp., 240 F.3d 262 (4th Cir. 2001) (the “inevitable unpleasantness” inherent in making a report cannot excuse an employee from taking advantage of her employer’s complaint procedure).
• Paid Time Off Policy: An employee handbook should cover the protocol for taking time off. It should provide guidelines as to how much paid time off is available. These guidelines should also include policies  for vacation and sick/personal time.

Periodically Review & Update Your Employee Handbook

A company employee handbook should be periodically reviewed. This review will ensure that it continues to comply with changes in the law. It will also take into account a change in circumstances. For example, when the number of employees changes, different employment-related laws may apply.

[Editor’s Note: To learn more about this and related topics, you may want to attend the following webinars: An Ounce of Prevention: Policies, Procedures, and Proactivity 2019, I Know What you Did Last Summer: Workplace Investigations, and Labor and Employment Law in an Hour – 2019. This is an updated version of an article originally published on October 23, 2017.]

©All Rights Reserved. July, 2020.  DailyDAC™, LLC d/b/a/ Financial Poise™

Article Footnotes:

• 1
  Aside from adverse actions such as terminations, other actions by the employer may be considered adverse actions that are found to be illegal or discriminatory. For example, a “constructive discharge,” may exist when an employer’s biased treatment of an employee becomes so intolerable that it causes her to resign. See Hill v. Winn-Dixie Stores, 934 F.2d 1518, 1527 (11th Cir. 1991). If the employee successfully establishes constructive discharge, the employer is liable for the same relief which would be available as if it had formally fired the employee. See Buckley v. Hospital Corporation of America, 758 F.2d 1525, 1530 (11th Cir. 1985). An employee can establish a prima facie case of constructive discharge when the employee shows that that the working conditions became so intolerable that a reasonable person in the employee’s position would have felt compelled to resign. Pennsylvania State Police v. Suders, 124 S. Ct. 2342, 2351 (2004). In assessing the reasonableness of the employee’s response to the discriminatory working conditions, courts generally require that the employee attempt to resolve the matter internally before resigning. See Garner v. Wal-Mart Stores, 807 F.2d 1536, 1539 (11th Cir. 1987).
• 2
  See, e.g., Clark v. United Parcel Serv., 400 F.3d 341, 349 (6th Cir. 2005) (employer’s efforts to prevent harassment can include a comprehensive sexual harassment policy that should at least (1) require supervisors to report incidents of sexual harassment; (2) permit both informal and formal complaints of harassment to be made; (3) provide a mechanism for bypassing a harassing supervisor when making a complaint; and (4) provide for training regarding the policy).
• 3
  See, e.g., Collette v. Stein-Mart, Inc., 2005 U.S. App. LEXIS 2093 (6th Cir. 2005); Kennedy v. Wal-Mart Stores, Inc., 15 Fed. Appx. 755 (10th Cir. 2001) (unpublished) (plaintiff complained repeatedly to managers about the harasser’s behavior, yet, for 10 months, management did not fire him, demote him, move him, or move the plaintiff).
• 4
  Faragher v. City of Boca Raton, 524 U.S. 775 (1998); Burlington Indus. v. Ellerth, 524 U.S. 742 (1998); see e.g., Walton v. Johnson & Johnson Serv., Inc., 347 F.3d 1272 (11th Cir. 2003) (summary judgment for employer affirmed when, after initial sexual advances by her supervisor, employee both failed to follow the harassment policy and returned to supervisor’s apartment on three occasions, drank alcohol, agreed to a massage, and was assaulted again by him. The employer reacted by terminating the supervisor after receiving complaint three months later.); cf. Hardy v. Univ. of Ill. at Chicago, 328 F.3d 361 (7th Cir. 2003) (six-week delay in reporting sexual harassment by supervisor reasonable when plaintiff-employee tried to first work it out and talk with her supervisor before reporting); see also Barrett v. Applied Radiant Energy Corp., 240 F.3d 262 (4th Cir. 2001) (the “inevitable unpleasantness” inherent in making a report cannot excuse an employee from taking advantage of her employer’s complaint procedure).