The Importance of an Employee Handbook

Regardless of the size of the company, the development of an employee handbook is a critical component of any business. Employee handbooks describe the policies, procedures, and expectations of the company. By setting these parameters, businesses can run more efficiently and effectively. Further, clearly communicated policies and procedures can help prevent employer liability when issues arise. The following discusses some important provisions that are commonly included in employee handbooks.

Information in Handbook

Defining who is an employee of the company, as opposed to an independent contractor, has several implications. The distinction between employee and independent contractor has an impact on taxes and benefits, like insurance or worker’s compensation. Employees are usually entitled to these sorts of benefits, while independent contractors are not. Clearly distinguishing between the two will help avoid issues in the future.

The employee handbook should define numerous general policies and procedures that relate to the daily management and operation of the company. This includes defining issues like the dress code, pay period, and company-recognized holidays. By addressing these issues, it helps employees know what to expect on a day-to-day basis during the course of their employment.

It is important to set out the leave policies of the company. For some employers, this includes meeting the requirements of the Family Medical Leave Act (FMLA). Under the FMLA, employees may take an unpaid leave of absence for the birth and care of a child or a medical emergency, among other life events. Regardless of whether the FMLA applies, all employee handbooks should address vacation time, maternity and paternity leave, and bereavement leave.

One of the most important aspects of the employee handbook relates to action that will result in discipline and what that discipline will be. Employee handbooks should state a zero-tolerance policy for sexual harassment or any type of discrimination. Additionally, the methods of voicing concerns over possible harassment or discrimination should be explained in the handbook. Clearly defining policies related to discrimination and sexual harassment will help to foster an accepting and productive work environment.

In addition, clearly describing the consequences of employee misconduct is important. This part of the employee handbook should avoid the use of absolute statements, thereby preserving the right of the employer to make determinations of the consequences for misconduct on a case-by-case basis.

Some other issues that are typically addressed in the employee handbook include:

  • Employee benefits
  • Worker’s compensation
  • Performance reviews
  • Retirement
  • Drug and alcohol policies

Employment Law Help

Employee handbooks are an important part of a company’s formation. With proper drafting, employee handbooks can help to prevent employer liability when issues arise. If you would like more information or help in developing your handbook,speak with an experienced employment law attorney at the Royse Law Firm today. We look forward to hearing from you.

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Roger Royse

Roger Royse, the founder of the Royse Law Firm, works with companies ranging from newly formed tech startups to publicly traded multinationals in a variety of industries. Roger regularly advises on complex tax structuring, high stakes business negotiations and large international financial transactions. Practicing business and tax law since 1984, Roger’s background includes work with prominent San Francisco Bay area law firms, as well as Milbank, Tweed, Hadley and McCloy in New York City.
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