Employee Handbooks

While most Human Resource Directors and corporate CEOs understand how policies, procedures, and forms are necessary to effectively operate any organization, there are few who establish them simply because "it is the way things have always been done." At the same time, there are many attorneys who will tell you that policies and procedures only place the company in situations loaded with liabilities because no policy or employee handbook can be without implied contracts.

An employee handbook should provide the most positive way of maintaining management discretion, and also firmly communicate mutual expectations. Many policies and forms can and should have attendant disclaimers that articulate the rights of the employer and the obligations of the employee.

The employee deserves to know what is expected of him/her and what he or she can expect in return. Since job satisfaction is based upon rewards and expectations, it only makes sense to establish benefits and disciplinary policies.

By establishing well-written policies, a company can expect that properly-trained supervisors and managers will take approximately the same course of action in similar circumstances.

When To Have An Employee Handbook?

At what point does a company have sufficient employment liabilities to warrant an employee handbook?

Your employment liabilities start when you hire your first employee, but havine one employee doesn't necessarily justify creating a handbook. It does, however, justify some written policies, perhaps in the form of formal memos on company letterhead, signed by the employee.

The following policies should be included in memo form for your first employee: hours of work and attendance, holidays, vacations, sick leave (if any), payroll deductions, and paydays. An at-will employment policy makes most small business owners very nervous, but it is still a good idea to have one. And it is equally important to have a written job description, however formal or informal as necessary, to define a position's responsibilities.

Judging from labor codes, a more complete and more formal employee handbook is warranted when the company hires its fifth employee. At this point, Fair Employment and Housing laws kick in (including, in six states, maternity leave laws). Once a company has to establish a policy regarding maternity leave, it must also have policies regarding the six other types of leaves, since most are dependent upon the others.

There is no question that, at 15 employees, an employee handbook is a must: federal Civil Rights, Americans with Disabilities, and Pregnancy Leave Acts all apply to companies with 15 or more employees.

So a formal employee handbook is desirable at five, essential at 10, and imperative at 15 employees.

Remember, however, that the reasons why a employee handbook is necessary - i.e., to communicate the policies of the company - are more important than timing of the employee handbook's production. And the overall reason is to reduce your liabilities through misunderstandings of mutual expectations.