Does your company’s employee handbook prohibit the use of Walkmans in the workplace? Does your document retention policy mention floppy disks? Does your dress code policy refer to “clam diggers” and “pedal pushers?” Does your handbook look like it was created by Dr. Frankenstein with bits and pieces from many other policies and handbooks from different sources and years? If so, it may be time for a handbook update. (And if you had to look up any of those references, you may be a Millennial or Gen Z).
An outdated employee handbook sends a message to employees that company policies are not routinely reviewed or enforced, or worse, that they are not considered to be important. By contrast, a current and well-maintained employee handbook not only sets workplace expectations for employees but also serves as a roadmap for management in addressing everyday workplace issues. An up-to-date handbook also shows employees that the employer is continually reviewing company policies to evolve with changes in the business and business environment, which in turn shows that it cares about its employees. Employers should take advantage of the opportunity to distribute clear, comprehensive, and up-to-date handbooks for the following reasons.
Basic Considerations. Every employee handbook should include an equal employment opportunity policy and policies related to discrimination and harassment, while keeping in mind that policy requirements and the list of protected classifications vary from state to state and may be broader than federal law requires. For example, New York state law expands protected classes to include gender identity/expression, domestic violence victim status, and arrest records (in certain circumstances). Illinois includes citizenship status, family responsibilities, and reproductive health decisions. Michigan’s Elliott-Larsen Civil Rights Act includes height and weight as protected classifications. Minnesota’s Human Rights Act protects against discrimination based on public assistance status. These are only a few examples.
While federal law and many states require certain laws and policies to be provided in writing, including posting in conspicuous locations, some states also require specific policies to be included in handbooks (that is, if the company has a handbook, since no state requires companies to specifically maintain handbooks). For example, if the company has a handbook, Illinois requires employers to communicate policies regarding sexual harassment and pregnancy accommodation in the handbook. Virginia employee handbooks must include a notice about reasonable accommodations for persons with disabilities and for conditions related to pregnancy and childbirth. It is important to make sure that employee handbooks comply with federal and state laws and are updated each time a new or amended law takes effect.
Handbooks should also contain clear at-will employment statements (except in Montana, where at-will employment is not recognized), ensuring employees know that they can leave employment at any time, for any reason, with or without notice, and that, likewise, the employer may terminate employment at any time, for any reason, with or without notice. (Realistically, employers should always have some reason for terminating employment, but having the policy is still useful and necessary.) Companies should take care not to impose any obligations or make any promises in handbooks that could be construed as creating a contract for employment. For instance, companies should avoid requiring employees to provide notice of leaving employment, which can negate the benefit of at-will employment.
Setting Clear Expectations: The primary purpose of an employee handbook is to communicate workplace policies and expectations. Some policies merely reiterate what the law requires, and some are specific to the operational needs of each individual company. Handbooks may include a wide range of policies, including operational policies, policies regarding benefits and leaves of absence, paid time off, dress codes, and a code of conduct. A company’s code of conduct should outline workplace expectations and specific conduct that may lead to disciplinary action, including termination. However, the policy should also include a statement that the examples of workplace conduct subject to discipline are not intended to be all-inclusive.
Providing Guidance for Management and Human Resources. A comprehensive employee handbook is beneficial not only because it communicates expectations to employees, but also because it serves as a resource for management and HR professionals. Realistically, most middle- and low-level managers are not going to be familiar with every word of their company’s handbook. But these managers should be familiar enough with the handbook to know what policies are in the handbook and to know when and how to look to the handbook for guidance in handling the gamut of everyday workplace issues. The handbook should also serve as a guide to managers (and employees) for day-to-day issues that arise, such as leave requests, general conduct, simple disciplinary matters, and simple performance concerns, including when it is necessary to involve higher level managers and HR professionals within and outside the company, such as for serious disciplinary and performance issues, complaints of harassment or discrimination, or separation from employment.
Promoting Consistency Across the Organization and in Different States. Comprehensive handbooks also allow decisionmakers to address workplace issues consistently. Consistency is especially important for organizations with multiple locations or a larger workforce with many departments and different management structures. Consistent application of workplace policies promotes fairness and minimizes allegations of disparate treatment, or an instance where an employee claims that policies have been enforced differently among employees, departments, or locations. If an employee handbook is out of date or fails to contain evolving policies, the company runs a greater risk of inconsistent enforcement. For example, a company that lacks a uniform policy regarding the use of artificial intelligence in the workplace may find that managers address employee use of AI differently across locations. It is impossible for all managers in every department of a company, in every location, to know what all other managers are doing on a day-to-day basis. But if every manager has available an up-to-date handbook and follows it, this eliminates the need for everyone to know what everyone else is doing and greatly decreases the chance of inconsistent (discriminatory) treatment.
Further, employment-related laws and regulations vary from state to state across a wide range of topics, such as protected classifications, leave laws, and required benefits. Therefore, it is important for companies with locations in more than one state to account for state differences. This is often done through one “national” handbook and state-specific handbook supplements that are distributed with the general handbook at the beginning of employment. This way, supervisors and employees in each state can be aware of state-specific laws and policies and also understand why employees in one state may be entitled to better or different benefits or treatment than employees in other states.
Supporting Legal Defenses. Businesses that have been involved in an employment claim know that documentation is critical. Employers who can justify employment decisions by pointing to a specific employment policy are better suited to defend against claims of wrongful workplace conduct. Handbooks should contain policies that promote documentation, such as establishing reporting procedures or requiring managers to document complaints and related investigations. An effective and up-to-date handbook can be much more useful in a defense than simply pointing to the fine print on the overly crowded employment and labor law posters in employee break rooms.
On the other hand, an outdated handbook may contain policies that are no longer relevant to the company or are not routinely enforced. When that happens, employees can make the argument that because some policies in the handbook are not enforced, they had no reason to believe that other policies would be enforced. One common example is a handbook that calls for “progressive discipline” (i.e., a certain number of verbal and written warnings prior to termination) but is not followed, with either none of the steps or fewer or skipped steps. Even a general disclaimer that the company reserves the right to skip a step or not follow progressive discipline at all will generally not save a company from a discrimination claim when the disciplinary steps are not used with one employee but are with others.
Another common situation is a handbook that states that performance reviews will be conducted on a regular basis (such as once per year) but in reality, they are performed randomly or not performed at all. Not conducting the performance reviews regularly under such a policy leads to employees who assume they are doing just fine when that may not be accurate, or to employees who argue that they are being singled out to be reviewed when others are not. Therefore, it is equally important to remove any policy that is no longer relevant or in effect.
Reinforcing Company Culture and Values. An employee handbook also provides an organization with the opportunity to communicate its company values at the outset. Including a mission statement and governing principles at the beginning of an employee handbook helps align employees with an organization’s goals and reinforce its workplace culture. Updating those statements on a regular basis shows employees that the company is active in its mission and is evolving with company and employee needs.