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Drafting Practical, Effective Employee Handbooks

by Jennifer Shaw and Julia Melnicoe Insel | The Daily Recorder | May 5, 2023

Almost every employer should maintain an employee handbook containing key employment policies. However, employers often misunderstand the role of handbooks. Below we discuss the most common mistakes in preparing employee handbooks, and the best practices in this important area.

The Purpose of a Handbook

At its most basic, an employee handbook provides employees with information required by law, such as an anti-harassment policy, or an employee’s right to certain leaves of absence.

The handbook also is a guide that communicates an employer’s expectations of employee behavior and performance, and informs employees how to seek help or raise a concern. For example, an attendance policy conveys the importance of punctuality and reliable attendance, and provides instructions on contacting the employer in the event of an unexpected absence.

Employers often do not appreciate, however, the role policies play in protecting the organization in the event of a wage and hour claim. California law places the burden on employers to prove that employees have been paid for all time worked and received all meal and rest breaks. Effective policies can help employers defend against claims that cannot be resolved through a simple review of time records.

For example, a compliant meal and rest break policy will provide clear instruction to employees regarding when and how they must take their breaks. The policy also will explain exactly how an employee must notify the employer if their break was interrupted or missed. In doing so, the policy puts some of the onus back on the employee to raise a concern. If the employee makes a claim down the road, and the employer can show that the employee failed to bring the problem to the employer’s attention as required by policy, the employer can better argue that it provided compliant breaks.

Setting the Right Tone

A handbook should be concise, clear, and sufficiently straightforward for all employees to understand. Yet, employers often are tempted to draft complex, legalistic policies with the idea that doing so will provide better protection. Many handbook “builder” programs also use this tactic. This approach often backfires, however, for a few reasons.

First, a handbook is not a contract. Employers cannot use handbook policies to reserve rights they do not already have, require employees to waive rights, or create an enforceable agreement. A handbook is best a viewed as a guide and a means of ensuring that everyone is clear as to workplace expectations. That said, of course, if a policy obligates the employer to take some action, the employer should ensure it does so.

Employees also may find overly complex policies difficult to read. A policy cannot successfully guide employees if employees do not understand it.

Finally, a handbook is only useful to the extent employees actually read it. Employers should put themselves in their employees’ shoes, and ask themselves whether it is reasonable to expect employees to absorb a 75-page document filled with legal jargon.

Maintaining Flexibility

Although handbooks are intended to guide employee behavior, employers frequently believe this means the policies should be as detailed as possible. Often, the opposite is true.

For example, employers often want to include a “Prohibited Conduct” policy that outlines unacceptable behavior. The first problem is that these types of policies often prohibit conduct that is obviously forbidden (e.g., theft), or already addressed by other policies (e.g., drug and alcohol use). The bigger issue is that employers then add to the list as other workplace problems arise — for instance, an employer might add something to prohibit online gaming after discovering an employee has been wasting company time. But, the more specific the list, the more it creates the appearance that behavior not explicitly included in the list is of lesser concern. Worse, such policies can undermine “at-will” policies to the extent employees misconstrue the list of prohibited conduct as the conduct necessary to constitute “cause” for termination.

The bottom line is that employers will never be able to anticipate every situation a policy might need to address in the future. For that reason, an effective policy is one that is flexible and discretionary enough to meet any number of circumstances.

Tailoring the Message

Many employers find the idea of drafting a handbook daunting, so they turn to software, templates, or even reusing policies found on the internet. While many of these resources are a solid starting point, they cannot be the end of an employer’s efforts.

Most template policies are designed with the assumption of a mid-size, white-collar office environment. That said, the legal requirements applicable to these workplaces are not universal. Different leaves of absence may apply depending on company size; key exceptions to overtime, reporting time pay, or rest breaks apply only in certain industries; and employers with employees who do not work in an office may need to provide instructions on heat illness prevention, travel time, suitable seating options, or driving company vehicles. Employers with employees outside of California may need additional or different policies to address other states’ laws.

Employers must ensure they tailor their policies to the needs and legal requirements of their actual workplaces, and should not view any templates or builder software as a “plug-and-play” solution.

Ensuring Compliance

The final piece of the handbook puzzle is to update them at least annually for changes in the law and best practices. Employers should seek assistance with competent legal counsel to ensure compliance with all applicable industry-specific standards.  Although doing so may seem pricey compared to using handbook software, a thorough handbook review is often one of the least expensive ways to spot issues in overall employment practices.

An employee handbook is the foundation of a functional workplace. Taking the time to draft clear and practical policies is one of the most important steps an employer can take to protect their business and establish effective, compliant employment practices.