(10-12 minute read)
The employee handbook is most commonly recognized as a vehicle for communicating company policies to employees. It’s less touted as a tool for attracting talent and protecting the business against employee lawsuits—which is unfortunate because the employee handbook is a powerful strategy in both of these areas.
In today’s digital age, paper employee handbooks are losing ground, as employees increasingly demand fast access to company information. As noted by Pew Research Center, “94 percent of jobholders are Internet users,” who work in all types of environments—from technology and non-technology firms to large and small businesses. These workers regard both email and the Internet as the most important communications and information tools.
Digital employee handbooks are easier to access, reference, and distribute than paper handbooks. Less costly to update than their paper counterpart, digital employee handbooks can help you avoid penalties associated with not following the latest employment laws. Even if you choose to retain the paper format, consider making your employee handbook digitally accessible as well.
Rather than reading like a boring company manual, your employee handbook should engagingly express your company’s identity and policies. Employees should want to read the handbook—and when finished, they should walk away with a firm understanding of the company’s values, expectations and policies.
The Motley Fool’s online employee handbook is a good example of how the employee handbook can be used as a recruiting tool. Note that this handbook used to be distributed and mailed to employees in paper form, which meant manually updating and sending the information off to a printer. Now, it’s an online, interactive handbook that conveys the company’s quirky personality, the type of employees the company is looking for, what is expected of employees, and how employees can expect to be treated.
Job seekers want to know what makes your company different. Use your employee handbook to highlight your unique traits and the benefits you offer.
The 2017 Carlton Fields Class Action Survey found that “across industries, companies spent $2.17 billion on class action lawsuits in 2016.” Further, labor and employment issues outpaced consumer fraud as the most prevalent type of class action organizations faced in 2016. This data poses a real problem for employers, as workplace class actions can not only be expensive but also harmful to the company’s reputation. For example, qualified job seekers who are aware of the lawsuit may feel that it’s best to stay away from the company.
While no strategy can make you immune from the threat of litigation, you can adopt proactive policies to reduce the chances of employment-related lawsuits. The issues at the heart of these disputes are often documented in the employee handbook. Therefore, proper drafting, communication, distribution and upkeep of the handbook are keys to mitigating the risk of lawsuits.
Per the Association of Corporate Counsel, the employee handbook can prevent or reduce employer liability by:
With workers nowadays starting to use the employee handbook as both a tool for information and litigation, it’s important to have a carefully crafted handbook that clearly spells out relevant company policies.
To properly create an employee handbook, drafters must know which federal, state and local laws and company policies they must communicate to employees. For multi-state businesses, more than one handbook may need to be drafted to ensure compliance with each state’s laws. These laws and policies may be related, but not limited, to:
With good reason, some employers dedicate a considerable portion of their employee handbook to wage and hour matters. According to the 2017 Carlton Fields Class Action Survey, wage and hour were predicted to be the next wave of class actions. This prediction varies from 2014 and 2015, when data privacy and security were forecasted as the next wave of class actions.
Creating a well-written handbook that addresses all legal concerns is a great start. However, this triumphant beginning can easily morph into your worst nightmare if you fail to update the handbook so that it conforms to new regulations and policies. An outdated handbook may not be able to withstand scrutiny by the court when faced with a legal battle. But, if the handbook is properly maintained, victory could be yours.
October 18, 2018
Article Compliance HR Professionals Under 50 Employees