Policies and procedures manuals — Illinois

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:

• The composition and educational level of the workforce will determine the complexity of the language and terms that are used in the manual.
• If the company is developing policies for the first time, it must decide how “tough” or “easy” it wants to be on a myriad of issues.
• Does the company want to do only the minimum the law requires or does it want to provide its employees with additional, more generous benefits, leave, pay, etc.?
• Will the manual cover the conduct and benefits of managers and executives, as well as employees?
• Will both unionized and non-unionized employees be subject to the manual? If the answer is yes, the policies will obviously have to be consistent with the union contract.

Necessary policies

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.

Family and medical leave policy

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.

Introduction to the manual

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.

Equal employment opportunity policy

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:

• race
• color
• national origin
• ancestry
• religion
• sex
• sexual orientation
• physical or mental disability
• pregnancy
• age
• arrest records
• citizenship
• marital status
• genetic information
• concerted activities of employees regarding on terms of employment
• order of protected status
• military status
• unfavorable discharge from military service
• assertion of a workers' compensation claim
• gender identity and/or expression.

Harassment policy

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.

Employment at-will policy

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.

Standards of conduct policy

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.

Acknowledgment form

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.

Other areas the manual may address

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:

• Workweek - State what the regular workweek is so employees know when they are to report to work and when they may leave, thus providing a basis for assessing punctuality and attendance.
• Breaks - Illinois law requires that employers provide employees who work at least seven and a half continuous hours with a meal period of at least 20 minutes, beginning with the first five hours of work. The policy should indicate that employees are not to perform any work related duties during an unpaid meal period.
• Overtime - Pursuant to federal and state law, employers must pay time-and-a-half for any hours worked in excess of 40 hours during a workweek (as defined by the employer) by non-exempt employees. Typically, however, employers are more worried about avoiding the payment of overtime that has not been authorized. Accordingly, employers should state clearly when and how overtime work is allowed and should consider requiring written approval before overtime work commences. That said, unauthorized overtime will still need to be paid, but a violation of a written policy regarding overtime can be the basis for discipline.
• Policies relating to the accommodation of disabilities - Employers should clearly state that they grant reasonable accommodations to qualified individuals with disabilities. The policy should provide a mechanism for requesting accommodations and further state the employer will engage in an interactive process to determine what, if any, reasonable accommodations may be appropriate under the circumstances.
• Illinois specific laws and policies - This Illinois Human Resources Manual contains references to and descriptions of a number of Illinois-specific laws that govern the workplace, including the Pregnancy Accommodation Act, Illinois Family Military Leave, the Victims Economic and Security and Safety Act, and leave for voting or jury service. If the manual is being used for employees in the state of Illinois, make sure an attorney reviews all personnel policies to make sure they are compliant with Illinois law and include all required policies.
• Vacations, holidays, sick and personal time - The policy should note at the outset that these benefits are what the employer is currently offering and that they are subject to change so that an employee does not claim to have a contractual right to such benefits. On these subjects, the communication in the manual is not designed to create a contractual obligation, but rather to promote the fact that the employer is providing such benefits, and to provide guidance as to when and how employees may obtain such benefits. Employers who do not wish for benefits (such as vacation time) to accrue year-over-year should so state in their policies.
• Substance testing - If the employer has a written program pertaining to drug and alcohol testing, the program should be included in the manual so as to avoid inconsistencies between the written program and the policy manual.  The employer should also carefully tailor any provision of the policy related to post-accident testing to reduce the risk of a claim that the policy discourages employees from reporting workplace injuries.
• Smoking - The employer should note that smoking is only permitted on authorized breaks, not when the employee needs to smoke, and at least 15 feet from the building’s entrance. The employer should identify any outdoor locations where smoking is allowed.
• Performance evaluations - The employer may want to describe the process it has for performance evaluations so that employees understand that there is a thoughtful review of their work on a periodic (or some other) basis. That said, content regarding performance evaluations should only be included if the employer is confident that the evaluations will be implemented and performed according to the stated policy. Otherwise, a lack of performance evaluations conducted with respect to any individual employee may work against the employer if there is a charge of discrimination or lawsuit filed.
• Computer and Internet use - This is an increasingly important subject and should be carefully written and emphasized. At a minimum, the policy should state unequivocally that there is no such thing as privacy on any employer-owned computer and that the employer may read any emails written on their equipment. The employer should consider forbidding the downloading of any applications to the computer without permission. The employer should also consider how it wishes to regulate use of the Internet and social media being mindful that, increasingly, employees are utilizing the Internet and social media as part of their work.

  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 Protecting electronic information for more information on this subject.

• Dress code - This subject is increasingly challenging. The guiding principle is to post written expectations that are consistent on a race and gender basis, realistic, enforceable, and likely to be followed by all employees. Many times a standard is set forth (that is, no blue jeans), only to be violated by supervisors or even officers. Buy-in on the standard at all levels is important for the policy to work. In addition, employers must be careful not to make their policies too subjective, or to implement policies that are seen as discriminatory toward minorities.
• Expense reimbursement - Beginning on January 1, 2019, employers may be required to reimburse employees for work-related expenses as part of an employee’s wages. Employers should consider adopting policies that limit the circumstances when employers are authorized to incur expenses on behalf of the employer, as well as reasonable deadlines for employees to submit documented requests for reimbursement. By taking these steps, employers can reduce the risk that an employee would claim a right to reimbursement for possibly significant, unanticipated expenses.
• Politics in the workplace - Political campaigning is considered protected speech under the First Amendment of the U.S. Constitution. The First Amendment, however, only applies to state action, that is, action taken by federal, state or local governments. These “protections” do not apply in the private workplace. The National Labor Relations Act (NLRA), however, gives non-supervisory employees a limited right to engage in free speech and other protected concerned activities for their “mutual aid and protection.” This includes the distribution of political materials on the jobsite so long as the distribution does not occur in working areas. Employers, therefore, are limited in their ability to restrict political speech on the jobsite. However, employers may impose the following restrictions on employees:
  • limit employee solicitations to non-working time and distributions to non-working areas
  • ban non-employees from soliciting or distributing materials on the jobsite
  • impose limits on employee use of corporate computer and email systems
  • restrict access to certain Internet sites through employer-owned electronic systems.
• Further, employers should be careful that their discussions of candidates or issues do not imply directly (or even indirectly) that they will discriminate, harass or retaliate against any employee based on their opinion, which may be related to their status in a protected class. The bottom line is that employers and managers can find themselves in legal trouble if they spread propaganda about their preferred candidate or political platform. While an employer should encourage its employees to vote, managers should never encourage employees to vote for a particular candidate. Also, employees should never feel coerced into supporting or contributing to a candidate as a condition of employment.
• Benefits - Employers like to use the policy manual to describe the benefits they may provide, such as health insurance, long- and short-term disability, and/or retirement benefits. The description of benefits should clearly state that they are subject to change. The description of the benefits themselves should also be fairly straightforward and inform employees that (where applicable) the summary plan document governs the particular benefit program. In most cases, the employer will want to refer the employees to human resources or another appropriate manager for further information and/or written documentation pertaining to employee benefit programs.

Implementing the employee manual

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.

Presenting new manuals

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.

Acknowledgment forms

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.

Revising the manual

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.

Enforcement 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.