When Was the Last Time You Reviewed Your Employee Handbook?

When we meet with clients, it’s not uncommon for the client to mention a dispute with an employee about overtime, disability, health benefits and other issues. The first question we always ask is, “Is it covered in your employee handbook?”

Unfortunately, many companies don’t realize that the employee handbook should be a priority until after problems arise. All too often, the employee handbook was created 10 years ago and shoved into a file cabinet, never to be heard from again.

What Is an Employee Handbook?

An employee handbook is both a formal document and a communication tool between your business and employees. It clarifies expectations for both sides and defines the employer’s legal obligations and company policies, as well as the rights of employees.

An employee handbook covers such topics as anti-discrimination and harassment policies, disability, compensation, employee benefits, work schedules, standards of conduct, employee safety and security, family medical leave, and media relations (who is authorized to speak publicly about the company.)

In recent years, employee handbooks have been expanded to include cybersecurity, social media, and other topics related to technology and the internet.

The Risk of Failing to Review Your Employee Handbook

Let’s assume your employee handbook hasn’t been updated in 10 years as mentioned previously. That means your employee handbook was last updated in the same year that the iPhone was introduced, and Facebook was just three years old.

If people are handling company and/or customer data on their mobile devices or personal laptops, as remote workers inevitably do, do you know if this information is being securely stored and transmitted? Are regulatory compliance requirements being met? Are employees using approved applications for work purposes?

If your employee handbook doesn’t clearly explain the specifics related to these and other topics, there’s an excellent chance that your company and your data is at risk.

Cybersecurity is just one example. How are you controlling your brand on social media? Who is authorized to post on your behalf? Does your employee handbook account for the latest industry regulations? What about the latest laws related to family leave, overtime, and the minimum wage?

An employee handbook should be a living document that’s reviewed regularly and updated as needed. Failing to stay on top of the employee handbook can create legal issues for your company.

How to Minimize Risk with Your Employee Handbook

Let’s be honest. Employee handbooks are written in large part to clarify a company’s policies and procedures in a way that prevents disputes and conflict in the workplace. They’re not exactly high on anyone’s reading list.

Although an employee document has an important legal function, some of the best employee handbooks are not written in legalese. The key is to balance comprehensiveness and precise accuracy with simplicity. While some technical jargon is inevitable, it can be helpful to write in layman’s terms, with a summary and key points of each section. This will make it easier for employees to understand, which can further reduce risk.

Create the right perception about your employee handbook from the moment a new employee is hired. When you hand someone a document with no explanation of its value, you imply that it’s not important. Walk through the employee handbook with each new employee, highlight key areas, and answer their questions. Many companies require employees to sign a document that says the employee handbook has been received and reviewed.

Finally, consider having your employee handbook reviewed by legal and/or human resources professionals every year or two, update when necessary, and alert employees to any changes. Reviews should also be conducted when new laws and regulations are passed. Even if no changes are made, it’s a good idea to require ongoing training to ensure employees are familiar with company policy, industry regulations if applicable, and any relevant federal, state and local laws.

LFL Veritas is not a law firm or human resources consultant, and this blog post should not be construed as legal advice. However, as accountants and business consultants, we see business owners dealing with serious issues that might have been avoided if the employee handbook was complete, accurate and up to date. We strongly recommend regular reviews to reduce risk.

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