There are many reasons for having an employee handbook, but here are the top five ways an employee handbook will benefit your business, regardless of your company size:
1. Help Defend your Company in Employment Litigation
When your company is sued for employment related claims, including but not limited to violations for meal breaks, rest breaks, overtime compensation, discrimination, or harassment, one of the first things your attorney will ask you to hand over is the employee handbook. The employee handbook is important because it is the de facto manual for your business operation, policies that were communicated to your employees in writing. In fact, the employee handbook is a standard question on court provided form interrogatories often used in discovery. Thus, even if your attorney doesn’t ask for it right away, opposing counsel will most definitely demand it be produced. If you don’t have an employee handbook, opposing counsel will likely use the absence of a handbook to prove the absence of any consistent policies or procedures upon which employees are treated.
2. Set Expectations for Employees and Management
It is important to set expectations for all employees and management. It is important that new employees understand what is expected of them, which may range from appropriate work attire to cell phone use during business hours. If employees understand what is expected, then they also know what not to ask for. In addition, many times business owners are too busy to oversee the day to day operations of the company and hire a manager to help deal with employees and certain business issues. However, even the most experienced managers will make a call that has seemingly insignificant impact, yet will cost the business heavily (i.e. holding on to an employee’s final paycheck for more than 72 hours). An employee handbook will help guide managers in your absence.
3. Treat Employees Consistently
Companies that operate on unspoken and unwritten policies create situations where employees believe they are being treated unequally and unfairly. An employee handbook is a place for employees to be comforted that they are not the only one required to request vacation in advance or that they were not the only one required to wait until the following month to enroll in company sponsored health insurance and 401k benefits.
4. Inform Employees of Benefits
The employee handbook exists to alleviate the burden from your company’s human resource representative from explaining the myriad of policies and benefits to each employee and for every new employee. In addition, employee handbooks can bring employees’ attention to company sponsored benefits and encourage participation, often times such participation benefit both employees and employer (i.e. 401k, health savings account, etc.).
5. Comply with all State and Federal Rules and Regulations
Lastly, the employee handbook will reaffirm, if there were any doubts, that your company adheres to all state and federal rules and regulations related to labor and employment.