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Why Your Organization Needs an Employee Handbook

By Keystone’s Human Resources Team

An employee handbook is not legally required but is a best practice for a few reasons. First, a handbook is needed to help comply with applicable federal and state employment laws such as those relating to harassment, discrimination, leaves of absence, and wage and hour concerns. Failure to have policies on topics such as these is an open invitation for legal claims against the company. Without clear policies, your leaders will lack the knowledge they need to properly address these key issues.

In addition, certain state and federal employment laws require employers to provide notice to employees about their rights and the employer’s obligations. This includes the federal Family Medical Leave Act and many state laws relating to paid sick leave, leaves of absence, and harassment.

A second reason to have a handbook is to make employer expectations clear. For example, policies relating to attendance, conflicts of interest, codes of conduct, and outside employment will set clear boundaries for your employees. Lack of knowledge about employer expectations will cause confusion for both employees and leaders. Neither will know the boundaries within which to act which can result in leaders managing individuals inconsistently. Inconsistent treatment of employees can lead to poor morale and claims of discrimination.

Your Handbook Should be Your Handbook

When you develop your employee handbook, you may be tempted to take a shortcut and download a sample from the internet or take another organization’s handbook and re-brand it as your own. This will create risks, such as failure to comply with employment laws applicable to your organization. It can also create unnecessary liability for your organization if the borrowed handbook includes policies that address laws that do not apply to your company. Your employee handbook should uniquely reflect your organization’s compliance needs and internal policies rather than those borrowed from another company.

A borrowed handbook may also include policies that are poorly written. Policies that are vague or too broad will be hard to understand and even harder to administer. They also put the company at risk of violating certain laws related to employees’ rights in the workplace. It’s best to have an expert draft your handbook, such as a qualified HR professional or employment lawyer. This will increase the chances that your handbook is compliant with applicable employment laws and HR best practices.

Your Handbook Should be Up to Date

Having a handbook that is not regularly updated can be just as risky as not having one at all. Employment laws change frequently, especially at the state level. States like California, Illinois, New York, and New Jersey regularly pass and amend their state employment laws. Not updating your handbook once a year, particularly in those states, can easily lead to your handbook being out of compliance and therefore increasing the chances of a claim. In addition, many companies want to add or amend policies each year based on internal organizational changes and cultural trends. For example, a social media policy is often found in employee handbooks today. A decade ago, there wasn’t a need. Not having one today will make your expectations unclear to both your employees and your leaders. The same is true of remote work and allowing employees to use their own devices, such as tablets and smartphones, for work. Policies are needed where these issues apply to avoid confusion and set parameters.

There is no required time frame on how often your handbook should be updated, but you may want to consider establishing a review standard, such as every two years. However, an annual review and update may be needed where you have employees in states such as those mentioned above.

Need Help?

If you are an employer who would like help developing your employee handbook, or if you have questions about any HR issue, contact our Risk Management Division by phone at 855-873-0374 or by email at hrhelpline@keystoneinsgrp.com. We will be happy to help!

Disclaimer: The information provided on this website is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this website does not create an attorney-client relationship between Keystone’s Risk Management Division or our employment attorney and the user or browser.