The Employee Handbook is not just a friendly set of guidelines generously compiled for the education of the new employee. The shrewd employer knows that the real purpose of the Employee Handbook is to protect the employer by setting out expectations of employees at the forefront, setting disciplinary policies and payment policies, and providing required disclosures.
Employee Handbook is a governing set of rules, that can bind both employer and employee through the employee’s acceptance thereof. The task of creating an Employee Handbook should not be taken lightly. The employer can unwittingly create liability and requirements for the employer that otherwise did not exist, if created haphazardly. When drafting the Employee Handbook, every clause should be incorporated purposefully, with an understanding of the implications.
The most important step, after finalizing your Company’s Employee Handbook is giving it to new employees on or before the day that they start work, and getting them to acknowledge receipt in a writing that you collect and keep. The reason this is important is because an employee is choosing to work for the Employer, and, if given the Employee Handbook before beginning work, the employee has the opportunity to turn down the work if not in agreement with the rules in the Employee Handbook. However, an employee who receives an Employee Handbook after he/she has already been working at a Company can argue that he/she did not get anything (in legal terms “no consideration”) in exchange for his/her agreement to abide by the rules in the Employee Handbook. However, distributing the Employee Handbook late is still better than not having an Employee Handbook. Also, there may be other steps that an Employer can take to ensure the Handbook is effective.
Retaining employees’ signed acknowledgements of receipt is just as important as creating the Employee Handbook itself. These signed acknowledgements are the Employer’s evidence in court that the employee did receive the Employee Handbook, and, therefore, was aware of the Company’s policies. This argument, alone, could win a lawsuit, if an employee is arguing that he/she did not have knowledge of a policy that is set out in the Employee Handbook. However, if the Employer failed to retain the signed acknowledgement, the Employer will have no way to prove the employee received the Employee Handbook and had knowledge of Company policies.
Creating an Employee Handbook usually brings up many other issues that Employers need to address. Therefore, creating an Employee Handbook is an excellent way to prepare for hiring your first employee, or bringing your Company up to speed, if already acting as an employer. Most states have disclosures that employers are required to provide to employees, and these disclosures can change annually depending on changes to the law. Therefore, it is important to be abreast of the most recent laws when drafting your Employee Handbook. Likewise, an Employee Handbook is not a static document. It is a living and breathing set of rules that governs your Company and should be updated at least annually, to ensure compliance with new laws and changes to Company internal policy. Of course, you must ensure that you retain all employee’s written acknowledgements of receipt of the updated Policy.