Drafting an Employee Handbook

Writing Useful Policies without Granting Employees more Rights than the Company Intends Requires Careful Planning

By Jack Merrill

You’ve gone through the analysis and decided you need an employee handbook. Now comes the hard part. You must decide what to include in the manual, then work through the difficult process of writing policies that serve the company’s interests without violating the law or giving workers more benefits than they are intended to have.

At this point, you have two rational options. You can avoid headaches by hiring an employment attorney to draft a manual for you, or create one and have it reviewed by counsel later. In either case, you must be aware of essential provisions and wary of legal pitfalls, since a poorly drafted manual will do more harm than good.

What follows is a non-exhaustive guide to some of the policies that should appear in every company’s manual and some issues to watch out for.

At-Will Employment Every manual should open with a statement that employees serve at will and without contractual employment rights. When the handbook is distributed, employees should sign a statement acknowledging that their at-will status will not be affected by the manual’s provisions. The disclaimer should reaffirm the employer’s power to alter policies in its sole discretion.

Sexual Harassment Employers of six or more must have a sexual harassment policy, and it is wise for all companies to institute one. The policy should define sexual harassment, make clear that it will not be tolerated, and outline complaint procedures. It must also provide contact information for state and federal investigators. Employers of more than six employees must hand out copies of the policy to each worker annually. Again, all employers will be wise to follow that procedure.

Vacation Pay Failure to pay wages due is a hot area in employment litigation, and many employers are unaware that accrued vacation benefits must be paid on termination of employment. Failure to do so can lead to triple damages and legal fees, so careful delineation of how vacation benefits accrue and are carried is important. When in doubt, state enforcement agencies tend to give the benefit to the employee, so care in this area is important.

E-Mail Policies Employers with e-mail systems should instruct workers that all messages may be monitored by the company. Employees should be warned against using e-mail to transmit defamatory, derogatory, obscene or otherwise inappropriate messages. They should be reminded that deleted e-mail can be retrieved and reviewed at the company’s discretion. They should also be prohibited from downloading or playing games on company equipment and restricted from using the internet for personal purposes.

Dangerous Language A manual should not include language that implies procedural or contractual rights. Among things to be wary of are probationary periods, which can suggest contractual rights upon expiration, and progressive discipline policies, which can be read to protect employees from termination absent specified warnings or grievance procedures. Employers should be careful that warning policies are discretionary.

Once the manual is drafted, reviewed by counsel, and put into place, employers should be careful to follow policies closely and to apply them consistently. How policies are interpreted, applied and implemented is important to their effectiveness and defensibility.