A poorly constructed employee handbook is worse than none at all

Human Resources

A poorly written employee handbook can actually be worse than having no handbook at all; therefore, employers need to be very careful of legal aspects when drafting one.

“That becomes the most dangerous issue — a handbook that is not properly drafted,” says Elizabeth Drew, an attorney at the Milwaukee-based law office of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, S.C.

Drew specializes in labor and employment laws and explained that if someone who doesn’t have a legal background drafts a handbook, it could become a recipe for disaster.

Most often, companies that have a human resource (HR) department will compose handbooks in-house, says Drew. More likely, companies without an HR department will seek outside help from a consulting firm or an attorney.

However, there are those employers who draft handbooks themselves. In those cases, Drew recommends submitting the handbook to their employment lawyer for review.

“That is the easiest way. Your employment lawyer is familiar with your business and can advise you on what should and should not be included,” she says.

For those employers who attempt it on their own, Drew suggests doing as much background research as possible.

“There is a lot of good material on the Internet, as well as a lot of HR publications that are useful,” she adds.

The problem that employers potentially face when they don’t seek outside help is that they are committing themselves to what they put into the handbook and many times the information is legally incorrect.

“I would say the most common mistake made by employers is not specifically stating the employment ‘at will’ clause,” Drew says.

Typically we assume that an employee’s employment is based on free will. This means that either party can terminate the relationship at anytime for any reason, explained Drew.

However, employers can cause mistakes when they include any type of progressive disciplinary policy, which is usually comprised of three steps — a verbal warning, a written warning, followed by termination.

“A contracted relationship is then created — most of the time it is done unintentionally and it was done inadvertently by wording,” says Drew.

Contracted relationships can’t be broken for no reason, which causes problems. Also if the handbook doesn’t reserve the “at will” clause, then termination can only be a result of reasons mentioned in the handbook, as opposed to being able to terminate for any reason, says Drew.

“Employers want to be sure to reserve that right of employment ‘at will,’” Drew stresses.

Inaccurate information is also a common mistake when employers write their own handbooks.

“Hypothetically, the worst case scenario would be if a handbook was discriminatory against a certain group of people,” says Drew.

Although she has never seen that severe of a mistake, she often sees employers incorrectly defining the law.

Drew recalls one instance when an employer defined the Family Medical Leave Act unlawfully. “Basically the employer stated that leave was granted at the discretion of the employer — that is not lawful,” she says.

“In that case, the employer completely ignored the law.”

Most of the important issues are addressed if the handbook is drafted by someone with an HR background; however, employers who are drafting their own handbooks should prioritize some important issues.

“The handbook should have an equal opportunity employment (EOE)/ nondiscrimination act,” says Drew.

The handbook should also specifically outline an employment “at will” clause and include an acknowledgement receipt signed by each employee — this can be kept on file showing each employee has read and understands the handbook, according to Drew.

“If a company has 15 or more employees, the handbook should include anti-discriminatory laws and also a section on harassment,” Drew says.

A policy on absenteeism and attendance is also recommend by Drew because those issues frequently come up, she says.

Once a handbook has been drafted and is legally correct, it is important for employers to remember to update it.

“It’s not good enough just to have a handbook and let it sit,” Drew says. “Every once in a while the employer needs to go through it and make sure it is accurate in terms of the management policy — that it is up-to-date.”

Laws and technology are constantly changing, so an employee’s handbook should reflect and adapt to those changes. For example, nowadays, a clause on e-mail usage is often included.

No matter who drafts the employee handbook, it should always be proofed by someone who has legal expertise to ensure it is legally correct and concise. If not, employers might find themselves in a legal bind.