A carefully drafted manual of policies and procedures, otherwise known as an “employee handbook,” can be a valuable tool for an employer. It forces the employer to think about and define policies in a number of areas important to the employment relationship. It also provides employees with a clear, written statement of the “rules” that govern the workplace. However, if improperly drafted or inconsistently enforced, a manual can be used against the company if a charge of discrimination or lawsuit is filed. The following chapter outlines a recommended process for drafting or revising an employer’s handbook, or policies and procedures manual.
It is useful to think in terms of a “policies and procedures manual” rather than a handbook. In keeping a policies and procedures manual comprised of separate and distinct policies and procedures on a variety of workplace-related topics, the individual policies within the manual may be revised and updated as needed without revising the entire manual. Moreover, a compilation of policies and procedures may be less likely to be interpreted as a contract for employment.
Regardless of the format of the employer’s policies, decisions should be made early in the process as to the content, form, and tone of the policies and procedures manual. There are also certain necessary policies that should be included in any manual and some policies that should be avoided. This chapter will discuss issues facing employers with regard to other recommended policies which are often found in handbooks, as well as other optional policies which employers may choose to include in their policies and procedures manual based upon the needs of the particular company. Finally, because policies in and of themselves are not effective without implementation, a plan for implementation is an important step in the creation of any manual.
Things to consider:
Very few federal or state employment laws require employers to insert particular language in their employee manuals. However, recent court decisions have made it advisable for employers to include certain policies and language in manuals, which communicate information about the terms and conditions of employment.
The Family and Medical Leave Act (FMLA) is the only federal employment law that specifically requires employers to include a particular policy in its employee manual. The Department of Labor’s regulations interpreting the FMLA state that an employer is not required to have an employee handbook, but if it does have such a handbook, the handbook must include a statement of the employer’s policy on FMLA leave. Of course, this requirement only applies to employers who are subject to the FMLA.
At the beginning of the manual, most employers include an introductory statement that welcomes employees and explains the purpose and scope of the manual. It is essential that this introduction contains a clear statement that the employee manual does not create a contract of employment between the employer and any employee, and that all employment is on an “at will” basis.
Another important element of any employee manual is a statement that the employer is committed to making all hiring and other employment decisions without regard to any protected classification, such as:
Federal law and Supreme Court precedent has made it an absolute necessity for an employer to develop and to enforce a strong and comprehensive harassment policy. Employers must include an anti-harassment policy that prohibits sexual and non-sexual forms of harassment. The policy must contain a complaint procedure providing employees with multiple, easily understandable avenues to report potential discrimination and harassment. Employers should provide training with respect to their discrimination and harassment policies and make sure that all employees sign a written acknowledgment indicating that they received and reviewed the relevant policies. The policies should further provide that the employer will not engage in any retaliatory conduct against an employee who makes a good faith report of discrimination, harassment, or retaliation.
Although a good employee manual will explain the at-will status of employment in the introduction, it is a good idea to include a separate employment at-will policy as well. In addition to stressing that the handbook will not change employees’ at-will employment status, this policy should also state that the employees’ at-will status may not be modified by any oral or written representations other than a written contract of employment signed by the appropriate officer of the company and the employee.
No law requires that an employee manual contain a list of prohibited types of employee conduct, but this is one of the main reasons many employers develop employee manuals in the first place. A typical standards of conduct policy should list the common types of misconduct which may result in discipline, but it should also stress that this list is not all-inclusive. The policy should also state that misconduct may result in discipline, up to and including termination at the discretion of the employer. The goal of the published policy is to place employees on notice of what is unacceptable conduct and what could result in discipline (including termination), while retaining the employer’s discretion to decide the level of discipline to be imposed.
One of the most important parts of an employee manual is an acknowledgment form. This form is usually included at the end of the resource and is designed to be read by employees, signed, and returned to the company to be retained in the employee’s personnel file. A good acknowledgment form will contain the same disclaimers found in the introduction about how the handbook does not create an employment contract or any other type of contract. The acknowledgment form should also reiterate that the policies may change from time to time and will be interpreted by the company in its sole discretion.
Some employers have decided to implement a mandatory-arbitration process which requires employees to resolve all employment-related disputes with the company through arbitration, rather than a lawsuit. While there are many pros and cons to implementing such an approach, it is important to realize that a statement embedded in an acknowledgment form which states that the employee is also agreeing to arbitrate employment-related claims may not be sufficient to keep the employee from bringing a suit. Many courts have indicated that mandatory arbitration agreements must be clear and will not be effective if they are simply included in a general acknowledgment form.
Employee handbooks or manuals will vary widely depending on the individual needs and resources of the company. No list will provide every conceivable subject or policy that an employer will want to provide in a handbook or manual. However, the following are policies that are typically included in employee manuals:
The National Labor Relations Board has been carefully scrutinizing the content of these policies for language that could be construed as violating employee rights to engaging in protected activities. See Chapter 31: Protecting electronic information for more information on this subject.
It is not enough for an employer to simply develop a comprehensive employee manual. The manual must also be distributed to employees and consistently enforced. Prior to implementing a new manual, it is typically a good idea to have a few key managers at each level review a draft of the manual. These managers can help assess whether the manual accurately reflects current practices, whether it sets realistic standards, and what employee reaction will be to changes.
When the manual is ready to present to employees, it may be rolled out with some degree of fanfare to ensure that all employees are aware of the new policies. On the other hand, if the “culture” of the company warrants it, a lower key approach may be more desirable. Often, the president/CEO of the company will issue a formal announcement and/or draft a welcome letter to be included with the manual. If the manual represents significant changes from the company’s previous policies, training sessions should be held for managers who will have to implement and enforce the policies. The human resources department should also be prepared to field and respond to questions from employees and managers during the initial weeks and months the new manual is in effect.
As noted previously, an important part of the implementation process is having employees sign the acknowledgment forms found at the end of the manual and return them to the company for filing. The manual will not provide the employer with much protection in the event of a lawsuit or other dispute if the company cannot demonstrate that the employee received and read it. The human resources department may want to keep a list of all employees and check each employee’s name off as it receives a signed acknowledgment form from that employee. Managers will also need to be educated in the importance of such forms, and the processing of such forms may need to be added to the new-hire process. The signed acknowledgment forms should be kept in the employee’s individual personnel files.
Additional periodic reviews should be conducted every year or two in order to ensure that the manual reflects any recent changes in the law, as well as changes in the company’s current practices.
Example: Current handbook provisions containing confidentiality rules, conflicts-of-interest policies, and policies governing social media should be reviewed to confirm that the policies do not contain language that has been found to be problematic by the National Labor Relations Board.
Each time the manual or particular policies are updated, the human resources department should keep several copies of the old manual or policies on file. These may be needed to manage an employee with disciplinary problems under a prior version of a policy, or if a lawsuit is later filed concerning events that occurred under a previous version of the manual.
Finally, it is critical to ensure that the policies documented in the manual are enforced fairly and consistently. Nothing looks worse in front of a jury than an employer that disregards, or worse yet, violates its own written policies.
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Policies and procedures manuals — Illinois
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