Essentials Of An Employee Handbook
There is no legal requirement in Pennsylvania that employers maintain an employee handbook, but for all but the smallest of employers, developing and maintaining an appropriate employee handbook is virtually essential in today’s business climate. Employee handbooks serve to introduce new employees to the company’s practices, set forth the rules by which employees must operate in the work place, delineate company policy and benefits, and when drafted appropriately and followed consistently, protect the employer against a variety of claims made by aggrieved employees. That said, poorly drafted or outdated handbooks can backfire on an employer and create liability which could have been avoided with a properly drafted handbook. Employers must bear in mind that employee handbook provisions are routinely used as exhibits at unemployment compensation hearings and in litigation on a variety of matters. Employers who take the time to follow a common sense approach to an employee handbook will do themselves and their employees a great service.
Pennsylvania is an “at-will” state, meaning that employers are free to terminate their employees for any reason or no reason at all as long as the reason for termination is not discriminatory and does not otherwise violate public policy. It is, therefore, critical that every employee handbook have a clear at-will statement and leave no ambiguity as to whether employees are anything but at-will. Care must be taken to avoid any language that would seem to provide employees with contractual rights that they otherwise would not have. Employers must be leary of language pertaining to “probationary employees” or language in a progressive disciplinary policy that would seemingly give employees rights to continued employment absent limited circumstances.
Compliance with Federal Law
Another critical provision that must be set forth in every employee handbook is a stated policy of non-discrimination making clear that the employer complies with all federal, state and local laws that protect employees in the workplace. Similarly, employers that are subject to the federal Family Medical Leave Act (and/or state and local Family Medical leave acts) must contain a provision in their handbook setting forth employees’ rights and the employer’s obligations under the appropriate laws. Employers who are not subject to the Family Medical Leave Act should not include such a provision so as to avoid providing employees with rights not provided by law.
Employee Compensation and Benefits
Set forth how employees are paid, whether salaried or hourly, reference the start and end to the work week and normal working hours, and include when employees will be paid and the fringe benefits to which they are entitled, including overtime pay. This section should include reference to the employer’s sick time and vacation time policies, including whether or not employees will be paid for unused time off. It is also important to put an absenteeism policy into place.
A key provision in the modern employee handbook is an anti-harassment policy. Such policies serve not simply to remind employees of the standards of conduct that are deemed acceptable in the workplace, but also serve to advise employees how to seek help if they or others are subjected to unwanted harassment, sexual or otherwise. The law provides employers with certain defenses to harassment claims if the employer maintains a sufficient anti-harassment policy and provides anti-harassment training to its employees. Defenses are unavailable if the anti-harassment policy and reporting procedure are insufficient, or if there is a lack of appropriate training.
Another important provision in the modern employee handbook is one which sets forth the expectations and limitations regarding the use of electronic communications and social media. When drafting such provisions, employers must be mindful of employee confidentiality issues and the employees’ right to self-organize under the National Labor Relations Act. Handbook provisions regarding the use of an employer’s computer systems, phones, internet, and other forms of electronic communication must balance the employer’s right in guarding against inappropriate communications against employees’ rights as protected by federal and state law.
Lastly, employers must assure that each of their employees sign a written acknowledgement indicating that the employees have received and reviewed the handbook. A handbook is useless if it is not actually provided to a company’s employees, and employees who have not received a copy of the handbook may not be bound by its provisions.
Cookie cutter handbooks that purportedly serve the interests of employers of all shapes and sizes are woefully insufficient. An employer who understands that an employee handbook is an asset to its business should understand that developing a handbook means developing it correctly. All too often employers who have received a handbook that was not specifically tailored to their business find themselves in trouble which could have been easily avoided with a little care. Moreover, having a handbook means having a handbook which is current with federal, state and local law. Lawyers in HRMML’s business advisory group are well-versed in the intricacies of employee handbooks and can help you develop, update and improve your handbooks.
Questions Every Business Must Ask
Q. Has your business recently reviewed its legal structure to determine whether it is set up in the most advantageous manner for legal and tax purposes, considering recent developments and changes in the law?
Q. Do the owners of your business have a current, updated buy-sell agreement which controls how ownership interests in the business are to be transferred in the event of an owner’s death, disability or termination of employment?
Q. Have the owners of your business developed a succession plan to define how ownership and authority will transition upon the death or retirement of the present owners?
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