July 30, 2018
I. Introduction
Employee handbooks and policies are an important communication tool between you and your employees. A well-written handbook sets forth your expectations for your employees, and describes what they can expect from your company. It also should describe your legal obligations as an employer, and your employees’ rights. A comprehensive employee handbook should clearly explain your company’s policies as well as the consequences for employee violations of those policies. It is important that every employee receive the same information about the rules of your workplace. Lastly, a properly drafted employee handbook may provide your company with legal protection if an employee later files an employment claim against you.
This article begins with a list of “must-have” contents for any employee handbook. Next is a list of “strongly-recommended” items, followed by a list of items “to consider.” The article then discusses three specific emerging policy issues: Tennessee’s “Guns in Trunks” law, social media, and “bring your own device” or “BYOD.” Finally, the article provides tips on writing, communicating, and implementing your policies. Note that to determine which specific policies should be included for your company, and precisely what they should include, it is important that you procure competent legal counsel to assist in drafting a comprehensive employee manual specifically tailored to your company’s needs.
II. Must-Have Items for Handbooks
A. At-Will Statement / Contract Disclaimer
To avoid abrogating your employees’ at-will status by inadvertently creating a contract via the handbook, your handbook must contain a clear, conspicuous statement that the handbook does not alter the employee’s status as an at-will employee and does not create a contract of employment.
B. Reservation of Rights
To avoid tying the employer’s hands in the future, your handbook must contain a statement that the employer reserves the right, in its sole discretion, to amend any portion of the handbook and/or any individual policy(ies) with or without prior written notice.|
C. Statement that Current Handbook/Policies Supersede Previous Versions
Similarly, the handbook, or any newly-promulgated individual policy(ies), must clearly state that they supersede any previous policy(ies) on the same subject(s).
D. Prohibition on Sexual Harassment and Other Types of Harassment
To protect the employer in the event of a charge of harassment and to protect employees who may be victims of harassment, your handbook must address sexual and other types of harassment. The policy should contain a section that both explains what sexual and other types of harassment are and states the company’s policy against sexual harassment or harassment of any kind in the workplace. To provide the employer the opportunity to invoke the affirmative defense to a harassment claim, where available, this section must also include a procedure for the employee to report harassment and should include a statement that reports will be investigated and that no one will be subject to retaliation. Other features are important as well; it is crucial to consult legal counsel to craft a policy that fully comports with Equal Employment Opportunity Commission (“EEOC”) Guidance and current best practices.
E. Statement that Any Information Regarding Benefits will be Trumped by Plan Documents if Inconsistent with Plan Documents
If the handbook describes benefits such as medical, dental, life insurance, etc., it is important to include a statement that if the descriptions in the handbook are inconsistent with the Plan documents, the Plan documents will trump the handbook.
F. Acknowledgment of Receipt of Employee Handbook
All employee handbooks must include an acknowledgment that the employee has received the handbook. The acknowledgment should be signed and dated by the employee and retained by the employer.
III. Strongly-Suggested Items for Handbooks
A. Purpose of the Handbook
The handbook should contain a statement that the handbook and policies are meant as a guide to employees to help them understand what is expected of them, etc.
B. Equal Employment Opportunity Statement
Your employee handbook should contain a section that states your company does not discriminate and is an equal opportunity employer. Employers must comply with all applicable equal employment opportunity laws prohibiting discrimination and harassment. Employee handbooks should include a section about these laws, and how your employees are expected to comply.
C. Employment Classifications
Your handbook should define the types of employees that the employer recognizes. For example, employment classifications might include full time, part time, temporary, per diem, or probationary. If the employer uses a probationary classification, your handbook should provide an explanation of any applicable probation period, including the duration and expectations of the new employee during this period. This section should also state that being in the probationary period, and completing the probationary period, is not a guarantee of continued employment and does not alter the employee’s at-will status.
D. Work Hours
Your handbook should indicate what the normal work hours your employees are expected to work. This description will likely include a statement that allows the company to modify the hours as necessary. The policy should also address breaks and overtime.
E. Attendance
As every Human Resources professional knows, poor attendance and tardiness are among the main reasons employees do not succeed in their positions. Your handbook should explain, in detail, your employee attendance policy. For example, your policy could include a requirement that any employee who calls in sick may be required to provide a doctor’s note as proof of illness. Similarly, your policy may require employees who arrive late to provide their supervisor with an explanation of the reason for the lateness.
F. Timekeeping
The handbook should include a policy on timekeeping, including how and when to clock in, and a prohibition on clocking in or out on behalf of another employee.
G. Pay Practices and Payroll Deductions
Your handbook should detail pay periods for when employees are paid. This section can also include, if applicable, whether the company will provide direct deposit or advances on pay.
Your handbook should also clearly explain to your employees that your company will make required deductions for Federal, State and local taxes, as well as voluntary deductions for the company's benefits programs.
H. Benefits
Your handbook should detail which benefits the employee is entitled to, including, but not limited to, Health Insurance, Disability Insurance, Life Insurance and any retirement plans. This section should also indicate which employees are eligible for the benefits.
I. Time Away from Work
1. Holidays
Your employee handbook should explain or list what holidays the company observes, as well as any explanation or qualification of how holiday pay is earned.
2. Vacation / PTO
Your employee handbook should clearly state how much vacation, PTO (paid time off), or similar time your company allows, how that time is accrued, and who is eligible to accrue it. You should also provide details on what notice the employee must give prior to taking any accrued time off. Because some companies provide more paid time off than others, it is important for your employees to know your company’s policy. The policy should also state whether accrued, unused time off is payable on termination.
Neither Tennessee nor Federal law requires that unused time be paid out at termination. If the employer adopts a policy saying that it will be paid out, however, Tennessee law requires the employer to honor the policy.
3. Sick Time
Many employers have moved away from separate “banks” of sick and vacation time, instead consolidating all paid time off as “PTO” or something similar. If your organization does provide designated sick time, be sure to include a clear explanation of how it is earned and how it may be used. Note that unused sick time does not need to be paid out at termination.
4. Other Paid Time Away from Work
Include a statement about other types of paid time away from work, such as:
_ Jury duty (required in Tennessee)
_ Time off to vote (required in some circumstances)
_ Bereavement leave (optional)
_ Maternity leave (optional)
5. Unpaid Time Away from Work / Leaves of Absence
If your organization is covered by the Family and Medical Leave Act (“FMLA”), you must have a separate FMLA policy that comports with U.S. Department of Labor (“DOL”) requirements. Organizations covered by the Tennessee Parental Leave Act (“TPLA”) (more than 100 employees at the job site or location) must also have a separate TPLA policy.
Organizations not covered by the FMLA should consider adopting a leave of absence policy to address requests from employees for time away from work beyond time covered by PTO/vacation or sick time, such as maternity/paternity leave or time to care for the employee’s own illness, or an ill family member. If your organization is covered by the Americans with Disability Act (“ADA”), remember that you may need to consider an unpaid leave as a reasonable accommodation in some situations.
Your handbook should also include brief statements about other types of time away from work that must be granted but may be unpaid, including military leave and witness duty leave.
J. Safety and Security
Depending on the nature of your organization’s work, your handbook should also include your company's policy for creating a safe and secure workplace, including compliance with the Occupational Safety and Health Administration's laws that require employees to report all accidents, injuries, potential safety hazards, safety suggestions and health and safety related issues to management. Safety policies should also include your company's policy regarding bad weather and hazardous commuting conditions.
This policy may also include your employee's responsibility for abiding by all physical and information security policies, such as locking file cabinets or computers when not in use, if applicable.
No matter what type of work your organization does, you should include the following safety basics:
1. On-the-Job Injuries / Worker’s Compensation
Your handbook should include a section that details the employee’s rights and obligations under your state’s applicable Workers’ Compensation Law, including the obligation of the employee to notify the company of any work related injury.
2. Drug and Alcohol Policy
Most employers should adopt a policy addressing employee use of alcohol and drugs, including over-the-counter drugs and drugs that have been prescribed to the employee. If your organization has or wishes to obtain a Drug-Free Workplace certification from the Tennessee Department of Labor, your policy must comport with numerous specific requirements under the Tennessee Drug-Free Workplace Act.
3. Driving on Company Business
Any employee driving on company business, whether using a company vehicle or not, should be subject to a policy requiring, at a minimum, that the employee wear a seatbelt at all times, refrain from texting while driving, and observe all traffic laws.
4. Company Inspection of Work Area
Employees should be reminded that permission to bring items, such as bags, onto the employer’s property is conditioned on agreeing to inspection by the employer on request. The policy should note the employer’s right to search, without advance notice, desks, cabinets, tool boxes, vehicles, including personal vehicles brought onto company property, bags, or any other property at the company, or in its vehicles.
K. Personal Use of Phones, Mail, Computer, Internet, and E-Mail
Your handbook should clearly state that the employee should generally not use the company’s phone, computer, internet and e-mail for personal use. The section should also state that the employee should have no expectation of privacy when using the company’s phone, computer, internet and email.
L. Personal Phones and Other Personal Communication Devices
Given the ubiquity of personal smart phones and the like, your handbook should include a policy addressing when employees are and are not permitted to use their personal devices during the work day.
M. Social Media
In a similar vein, and as addressed in more detail below, every employer should have a policy addressing boundaries and expectations for employees’ social media use.
N. Employee Concerns / Problem-Solving Procedure
Your handbook should contain a procedure for an employee to express the employee’s concerns and/or complaints. Employers are strongly encouraged to adopt a formal problem-solving procedure, so that employees know who to talk with about concerns and problems, and how to escalate concerns up the “chain of command.”
O. Reasonable Accommodations
To comport with best practices under the ADA, your handbook should include a policy addressing requests for reasonable accommodations. This policy should put the burden on employees to come to Human Resources with any requests for accommodation. In addition, it should state that any employee requiring an exception to one of the policies in the Handbook as an accommodation for a disability, is required to make that request to Human Resources.
P. Personal Appearance
Many employers feel that it is not necessary to set specific standards in appearance policies, instead relying on employees’ “good judgment.” Putting aside the problem of whether all employees do, in fact, have “good judgment,” there is also the problem that what is “appropriate” is often very subjective. Articulating specific standards helps ensure that employees project the professional image that the employer desires. The standards can also head off embarrassment and hurt feelings. It is easier to discuss issues like personal hygiene or use of excessive fragrances with an employee if the employer can point to a policy provision. Similarly, it is less likely that an employee will feel singled out for his or her inappropriate dress if there is a uniformly-applied policy in place.
Q. Tobacco Use
A tobacco policy is fairly straightforward, given Tennessee’s smoke-free workplace law, but your handbook should articulate if and where tobacco use is permitted. Your handbook should also address the use of nicotine substitutes, such as “ecigarettes.” These devices can be disruptive, so they should be restricted to the same extent as regular cigarettes.
R. Discipline
Your handbook should include information about the company’s employee discipline policy. The policy should have an introductory paragraph which states that: (1) the company expects that its employees will conduct themselves properly at all times; (2) when discipline becomes necessary, the company generally prefers to use progressive discipline; and (3) the company reserves the right to impose any level of discipline deemed necessary, depending on the offense involved, up to and including discharge for a first offense.
S. Weapons and BYOD
As discussed in sections below, employers should also consider their policies on bringing firearms to work and how to regulate employee use of their personal devices for work purposes (“Bring Your Own Device”, or “BYOD”).
T. Workplace Violence and Bullying
Employers should have clear policies stating zero tolerance for workplace violence. Bullying is a growing area of potential liability, which should also be addressed and prohibited in the workplace violence and/or harassment policy.
IV. Other Items to Consider Including in Handbooks
The following policies and topics are also suggested for inclusion in your handbook.
A. Welcome Statement
Many employers include a statement at the beginning of the handbook welcoming the employee to the organization. This is often written by the President or other company executive. You may also wish to include information about the history, mission, and values of the organization.
B. Employee Relations Statement
In workplaces that are not currently unionized, it is helpful to include a statement to the effect that the employer prefers to communicate directly with employees and prefers to remain a non-union company.
C. Confidentiality
Although all employees owe a common-law duty of loyalty towards their employer, it is often helpful to articulate a policy on confidentiality and confidential/proprietary information.
D. Performance Reviews / Promotions
Your handbook may contain a section that outlines the performance review process that the company employs. If applicable, the section should indicate how often the reviews are done and what factors are considered at the reviews, as well as what factors are considered for promotions.
E. Anti-Nepotism and Anti-Fraternization
It is a good idea to articulate a policy against nepotism, as well as a policy regulating dating and romantic liaisons. It is particularly important, as a guard against sexual harassment claims, to consider restricting managers and supervisors from dating subordinate employees.
F. Other Topics to Consider
Depending on the employer, there may be other information that is necessary and/or appropriate to include in your handbook. Among the topics to consider are:
_ Hiring and referral policies;
_ Employee records;
_ Job postings and transfers;
_ Specific conduct rules;
_ Non-solicitation;
_ Contact with government agencies;
_ Contact with the media;
_ Company property;
_ Uniforms;
_ Moonlighting;
_ Gifts or gratuities;
_ Visitors; and
_ Training and education.
G. Handbooks in Summary
Every organization is different and each company may wish to include more or less in its employee handbook. An employee handbook can be an invaluable tool for an employer, serving to inform employees about company policies, procedures and practices and to communicate expected standards of performance and conduct. A well-designed handbook can positively influence employee morale and promote employee loyalty. It can introduce a new employee to the company, helping the individual to fit in more easily. In addition, the handbook can create a sense of consistency of practice that will enhance the employee's feelings of being treated fairly – there are few factors more destructive to the employment relationship than an employee's belief that employment decisions are arbitrary. The handbook can also serve as a reference guide to help managers and supervisors take appropriate actions in a given situation. Without the handbook, supervisory employees are left to their own devices – which can lead to uninformed, inconsistent and possibly illegal decision-making.
The well-drafted employee handbook can also be an important tool to avoid liability in employee lawsuits. The employer that clearly states policies against harassment and discrimination, outlines grounds and procedures for termination and follows these guidelines over time will be in the best position to defend against charges in these areas. Distributing a handbook to all employees ensures that the company’s critical standards are accessible to all, and that each employee will have a handy reference when questions arise. However, if your company’s employee handbook has not been updated in the past six months, at a minimum, it is likely out of date. As a rule of thumb, reviewing and updating your company’s employee handbook annually is a good practice.