This is part 5 of a 7 part series highlighting common legal missteps of small businesses.
Mistake #5: Not creating an employee handbook.
An employee handbook is an important communication tool between your business and its employees. An employee handbook should set forth the policies of your entity, thereby establishing your expectations of your employees and describing what your employees can expect from you. The violation of these policies creates the basis to terminate an employee for misconduct. The failure to promulgate these policies could result in the company being forced to pay unemployment to a terminated employee despite the company believing that the termination was justified. Often, employee handbooks cover the following: General Employment Information, Anti-discrimination/harassment Policies, Compensation Policies, Standards of Conduct, Safety and Security, Computer Policies, Employee Benefits, Leave Policies, Non-disclosure and Conflict of Interest Policies
General Employment Information – Your handbook should provide a summary of your business. In addition, you should provide information about probation periods, termination and resignation procedures, and relocation and transfer procedures, as applicable.
Anti-discrimination/ harassment Policies – Discrimination and harassment in the workplace are serious issues with serious penalties. It is important that you be pro-active and inform your employees of the standards of conduct in which they are expected to discharge their duties. Moreover, it is important you establish a formal procedure for reporting violations of these policies, investigating whether a violation has occurred, and disciplinary actions should it be determined a violation occurred. Establishing these policies can help insulate a company from acts of harassment and discrimination in the work place.
Compensation Policies – Your handbook should discuss your policies of frequency of payment, timekeeping responsibilities, bonus structure, if any, salary increase structure, if any, and breaks. You should also discuss your legal obligation regarding overtime pay and that you will make appropriate deductions for federal and state taxes.
Standards of Conduct – You should document the standards of conduct to which you expect your employees to adhere, including any dress code, if applicable. Also, if you are engaged in a business that is regulated by the government, reproduce the relevant legal obligations.
Safety and Security – Pursuant to the Occupational Safety and Health Act (“OSHA”), you must provide a safe workplace; free from recognized hazards that cause, or are likely to cause, death or physical harm to your employees. These laws also require employees to notify management of accidents, injuries and other matters. The OSHA regulations and employee notification procedures should be documented in your handbook. Additionally, your handbook should document any security requirements, such as locking of lockers, doors, computers or filing cabinets.
Computer Policies – Your handbook should outline policies for appropriate computer use including the use of company Facebook, Twitter, Instagram and other social media accounts. It should also document steps your employees should take to protect personal identifiable information of your customers.
Employee Benefits – It is important that you document any benefit programs and eligibility requirements, including any benefits that you are required to provide by law.
Leave Policies – Your handbook should document the leave policies required by law (family medical leave, jury duty, military leave, and time off for court cases and voting). In addition, you should explain the company’s policies for vacation, sick leave, holiday and bereavement.
Non-disclosure and Conflict of Interest Policies – While these are not legally required, Non-disclosure agreements and Conflict of Interest Policies help protect trade secrets and proprietary information of your company.
Moisan Legal P.C. is a boutique law firm focusing on representing entrepreneurs and businesses in a variety of legal issues. Matthew J. Moisan can be reached at 646.741.5222.