What Are You Legally Required To Include In Your Employee Handbook?

By July 31, 2018FLSA Rules
SwipeClock small business compliance

Many small business owners overlook the importance of a comprehensive, well-written employee handbook. A good employee handbook serves many purposes. Is your handbook a useful tool for everyone at your organization?

An effective employee handbook will:

  • Establish expectations for employees
  • Codify, organize, and update company policies
  • Simplify onboarding
  • Help employees succeed
  • Make training and enforcement easier for managers
  • Reduce the admin burden on Human Resources
  • Protect your company from compliance violations

We will address each of these points in future articles. Right now, we will focus on how an employee handbook can help you comply with workplace laws.

Your Employee Handbook and Small Business Compliance

The Federal Department of Labor does not require you to have a handbook, per se, but they do require you to inform employees of their rights. Some employers forego a handbook for mandated workplace signs. During onboarding, they hand out a stack of paper notifications they are required to provide in written form. Smart employers have the required workplace signs plus a thorough, clearly-written employee handbook.

Look beyond the bare minimum requirements. Use your handbook to help you comply with all the laws that affect you. Effective communication is necessary for business success and legal protection.

State, Federal, Local, and Union Workplace Laws

Before you start writing a new handbook (or updating an existing one), it’s important to understand that many laws are at play here. If you have employees in more than one city or state, you will need location-specific sections of your handbook. Create a core document with information that applies to all staff. Have separate sections where local or state laws (or collective bargaining agreements) differ from the Federal provisions.

At-will Employment Clause

Employment deemed “at-will” means either party can terminate the working relationship at any time. In all states except Montana, this working agreement is assumed by default. If you have employees in Montana, make sure you spell this out.

Equal Employment and Anti-harassment

Take your time with this section. Make sure you outline your policies in detail. Instruct your employees on what to do if they are subject to harassment or observe a violation. Plus, outline what you will do if presented with a claim.

Federal Medical Leave Act (FMLA)

In addition to the FMLA poster, the information must be provided in written form. If an employee needs to take leave, they can consult your handbook for detailed instructions on how to fulfill their responsibilities under the law. This can help prevent problems and ensure that everyone is communicating. Be aware that some states have FMLA provisions that provide more leave than the Federal law.

Occupational Safety and Health Administration (OSHA)

To maintain a safe work environment, your employees need to know your safety protocols. These should be taught and reinforced in many different ways. Your employee handbook won’t be the only place they are found. Most likely, your employees will receive in-person training and you should have the obligatory OSHA or state safety posters. By presenting them in the handbook on day one, you emphasize their importance. You want your employees to understand your commitment to a safe workplace.

Drug-Free Workplace Policies

The Drug-Free Workplace Act of 1988 was discontinued in 2010. However, your state may have a similar program in effect. It’s a good idea to have a substance abuse policy whether or not you are required by law. If you do drug testing, your policies have anti-discrimination implications. Make sure you know the laws and state them clearly in your handbook.

Final Paycheck and Unused PTO

End-of-employment issues may be subject to a Federal or State law depending on where you live. Consult your employment counsel on formulating and documenting your outboarding policies. Which leads us to another one:

COBRA Notifications

Your handbook should outline what happens when an employee quits or is terminated. If you offer health benefits, former employees can enroll in COBRA. (COBRA is an acronym for the Federal Consolidated Omnibus Budget Reconciliation Act which provided continuing health coverage protections. In practical usage, it refers to the benefits plan offered by the company under COBRA.) Former employees who apply for COBRA will need to complete enrollment forms. If you have a unified HR portal, you can include a link to these forms in your handbook.

Time and Attendance Compliance

Many wage and hour laws are related to time and attendance. These include meals and breaks, PTO, minimum wage, overtime, and Fair Work Week.

General Disclaimers

There are probably a lot of documents floating around your company. Protect yourself from outdated or poorly-written policies that were created before current laws. State clearly that the handbook supersedes any other policies. This also gives you a measure of protection from informal or “assumed” policies, both of which could contradict official policies or employment law. In addition, protect yourself by stating that the policies are subject to change.

Employee Acknowledgment and Agreement

Online HR portals with electronic signature simplify employee acknowledgment. Employees can read the policies in digital form and signify their understanding and agreement to abide by them. The confirmation document is automatically included in each worker’s file. Employees, managers, and admin staff can search the database quickly for any document they need to access. Electronic document management simplifies compliance and reporting.

Small Business Compliance

SwipeClock provides workforce management software that helps employers comply with Federal, State, and local workplace laws. In addition, the SwipeClock blog includes dozens of articles on small business compliance including Fair Labors Standards Act (FLSA), employee scheduling laws, FMLA, meals and breaks laws, Payroll Based Journal (PBJ), and the Affordable Care Act (ACA). To find an article on a specific compliance topic, use the search bar on the right-hand side—just above the links to the most recent articles.

For more information on SwipeClock’s industry-leading HR portal, visit WorkforceHUB.

By Liz Strikwerda

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