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Employee Handbook Could be a Liability If Not Updated

Posted on: September 17th, 2014

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Employee Handbook

In our recent webinar, The 5 Biggest Pitfalls Facing Small Businesses, we polled our audience to learn how often they updated their employee handbook. The poll produced some surprising results, shown below:

As policy changes/rules occur – 13%, Rarely – 47%, Annually – 40%

Our world is moving at a hectic pace. Technology changes, new devices, data privacy, social media usage, ACA mandates, benefits, minimum wage rules, and new tax laws often require new company polices and an updated employee handbook.

Small and mid-sized companies are at increased risk because they typically do not have the internal resources to stay on top of new laws, evaluate current policies or update the employee handbook on a regular basis.

Recent actions by the NLRB (National Labor Relations Board) have forced employers to take a long, hard look at what they’re asking employees to do, and — more importantly — not do. Most recently, the NLRB has taken on the task of determining whether various handbook policies are appropriate or not. One wrong sentence can completely nullify an otherwise sound policy.

See for additional background on recent cases

Keeping the employee handbook up to date, on a regular basis, is absolutely necessary to reduce your company’s risk and avoid future litigation. Vague policies, or rules that are not even addressed in the handbook, can be hidden liabilities.

It’s much harder to defend yourself against a policy or rule that doesn’t exist in the handbook.

Companies that rarely update their employee handbook, and even those who make annual updates, are at increased legal risk because so much changes so quickly.

At a minimum, here are the Top 5 “must haves” for your employee handbook:

1.  Employment is at will (mention multiple times)
2.  Non-harassment statement (required in MA)
3.  Social media policy
4.  Standards of conduct
5.  Signature page (employee has received and read the handbook)

While similar language may be found in other handbook policies, we also highly recommend having a separate “Anti-Retaliation” policy. Retaliation claims and lawsuits have skyrocketed, so you can never mention your stance on this too much.

There are many other policies and procedures that should be included in your employee handbook too. The key is to consistently update and enforce those policies. Inconsistent enforcement is viewed as a negative by the courts and may lead to significant penalties in a loss.

MassPay helps companies create and update their employee handbook to reduce risk and stay in compliance with constantly changing laws.

Contact Us to learn more about our HR services and how we can help you reduce your liability.

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