Why and When Do You Need An Employee Handbook?
Why to have an Employee Handbook…
While most business owners understand why policies, procedures, and forms are necessary to effectively operate any organization, there are a few who actually establish them because "that's the way it has always been done." There are no endeavors without risk, but in human resources management, risk must and can be diminished. The major points for establishing policies and procedures are:
• In the absence of policies, past and present activities become policy. Since many of these practices are or can be discriminatory (because of a lack of consistency), the company is in greater danger of law suits and claims than if they had carefully spelled out the company's expectations of the employee.
• There is as much danger in saying too much as too little. What a handbook should do is to provide the most positive way of maintaining management discretion while firmly communicating mutual expectations.
• The employee deserves to know what is expected of him/her and what he or she can expect in return. Since job satisfaction is based upon rewards and expectations, it only makes sense to establish "benefits" and disciplinary policies.
• By establishing well-written policies, the company can expect that supervisors and managers will (if properly trained) take approximately the same course of action in similar circumstances. It is not the handbook that is usually at fault but rather the way policies are administered or not administered by management.
• Until the laws and labor codes in the U.S. catch up with the realities of the workplace, reduction of liabilities through structure and direct communications of rights and obligations are still best disseminated through a handbook. A tailored handbook where an HR consultant does 95% of the work and you provide the input is a valuable option.
When to have an employee handbook…
Many states have laws and labor codes pertaining to companies with just one employee. In most states with labor codes for example, all "wage orders" (e.g., hours of work, overtime, physical working conditions, and wages ) apply to companies with just one employee. This is also true of the federal Fair Labor Standards Act. So, should you have an employee handbook for yourself? Perhaps not, but the minute you hire even one employee, you do need written policies, at least in the form of formal memos on company letterhead - signed for by the employee. Policies such as: at-will employment, hours of work and attendance, holidays, vacations, sick leave if any, payroll deductions, and paydays.
Judging from labor codes, a more complete and more formal handbook is warranted when the company hires its fifth employee. It is at this point that Fair Employment and Housing or EEO laws "kick in" including the six types of leave laws. At 15 employees, an employee handbook is a must: federal Civil Rights, Americans with Disabilities, and Pregnancy Leave Acts all apply to companies with 15 or more employees. So the answer to the question is that a formal employee handbook is desirable at five, essential at 10, and imperative at 15 employees.
Remember, however, that the reasons why a handbook is necessary, i.e., to communicate the policies of the company, are more important than when, and the overall reason is to reduce your liabilities through misunderstandings of mutual expectations .
InConcert Financial Group has developed a comprehensive employee handbook template over the past 5 years that meets any company's needs. It is written in plain English, not legalese, and with a few hours of customization, will effectively inform your employees while protecting the company. Contact Leslie Philbrook , our certified Senior Professional in Human Resources (SPHR) to discuss your particular HR needs at 510-235-1044 or lphilbrook@inconcertfinancialgroup.com
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