Whether you have three employees or 300, you need to have a way to inform them of your company's policies. An employee handbook serves as the bible of a company, providing the answers to some of the most basic employment questions.
7 reasons your company needs an employee handbook
- Mitigate Liability - Well-documented human resources policies outlined in the handbook will put you in a strong position to defend yourself from lawsuits. In most cases, winning an unemployment case requires proof that the terminated employee knew about the rules that led to his or her termination. The page of the handbook containing the applicable policy, as well as the signed acknowledgement form, is critical to the defense of unemployment or other legal claims.
- Define Your Rights as an Employer - Written policies concerning workplace inspections, drug testing and background checks will help establish your rights as an employer. Also, having a disclaimer in your handbook allows you to make changes to employee benefits and job requirements should the need arise.
- Set Rules - Employees need to know the protocols of the workplace. A handbook can clearly explain your dress code, drug testing policy, how to request time off from work, how to report possible theft or workplace violence, etc. Also, when rules are broken, employers can point to the specific language in the handbook for counseling or disciplining employees.
- Set Expectations - An employee handbook will help your employees understand what is expected of them and what the consequences are for not meeting those expectations. In addition, by laying out your expectations up front, your employees will know exactly what they need to do to succeed in their jobs.
- Treat all Employees Consistently - If you have several managers or executives, the handbook helps ensure that they treat all employees and issues consistently across your organization. Although every situation is different, the handbook provides a framework for managers to follow.
- Define The "At-Will" Relationship - In most states, employees who are not under contract may be terminated at-will. However, this employment-at-will doctrine can generally only be enforced when it is communicated to the employees. One way to do this is through your handbook, specifically on your signed acknowledgment page.
- Explain Benefits - Benefits are useless if your employees don't know about them. Through the handbook, you can list all benefits provided by your company, such as medical insurance, short-term disability and retirement plans. As an employer, you spend a significant amount of money on benefits that employees may not understand or appreciate. A handbook allows you to take credit for all the benefits you provide for your workforce.
In today's business environment, an employee handbook serves both as a sword to carve out your legal rights as well as a shield to protect them. A handbook also sets expectations, encourages employees to behave in certain ways, helps ensure employees are treated consistently, publicizes employee benefits and helps win unemployment claims and lawsuits. Considering all of the preceding points, you should make sure that you have an up-to-date, well-written, legally compliant handbook for your benefit, as well as for your employees.
For more information about creating and implementing an employee handbook, contact Carrie Cox via email, or Cindy McSwain using her information below.
Senior Vice President
Cindy McSwain leads AGH’s outsourcing services group. Her team provides payroll, accounting, funds disbursement, controller, and other financial outsourcing services to numerous clients throughout the U.S. Prior to joining the outsourcing group, Cindy served AGH’s audit clients for 10 years, working with a wide range of middle-market, closely held and family-owned organizations.
Her current clients cross many industry sectors, including manufacturing and distribution, restaurants, retailers, medical and not-for-profit. She has participated in numerous SEC filings and public registrations and has experience in mergers and acquisitions. Cindy is a certified public accountant and a member of both the American Institute of Certified Public Accountants and the Kansas Society of Certified Public Accountants.
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