Mistakes to Avoid in an Employee Handbook

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An employee handbook is important for both employers and employees, laying out policies and procedures that everyone in the company needs to be familiar with. In a previous post, we discussed elements that an employee handbook should include.

Here, we explain mistakes to avoid when drafting an employee handbook. Avoiding these mistakes will improve communication with employees, help maintain a pleasant workplace environment, and help avoid costly legal disputes.

Creating an Implied Contract 

In our previous post, we noted that, according to the Supreme Court of Arizona, a provision in an employee handbook creates an implied contract if a reasonable person would interpret it as a promise. This principle applies both to terms of employment and other factors affecting employment.

In particular, Arizona is an “employment at will” state, meaning that employees usually may be terminated for any non-discriminatory reason at any time, and employees can quit at any time. The Arizona Employment Protection Act lists exceptions to this rule, including if there is a written employment contract.

An employee handbook can avoid creating an implied employment contract by including a clear disclaimer that the handbook is not a contract, does not confer contractual rights, is intended just to provide guidance, and can be updated or modified at any time. Furthermore, it should plainly state that the employment relationship is “at-will” and can be terminated by either party, regardless of whether there is notice or cause.

In Roberson v. Wal-Mart Stores, Inc., No. 1 CA-CV 00-0555 (2002), the Court of Appeals of Arizona held that the plaintiff, a Wal-Mart employee, did not reasonably interpret the company’s employee handbook to modify the at-will employment relationship because the handbook included prominent disclaimers. However, the court noted that disclaimers in an employee handbook will not necessarily invalidate another implied employment contract that contradicts the disclaimers, such as one provided orally or in writing during the interview process. 

Finally, note that an employer can still be sued for wrongful termination under the Arizona Employment Protection Act. As a result, it is important that handbooks be carefully drafted to comply with all federal, state, and local laws and regulations.

Failing to Clarify Paid Time Off Rules

Although Arizona law specifies that employees must receive a certain number of earned paid sick leave days (depending on the size of the company), employers otherwise are free to implement whatever rules they wish regarding paid time off (PTO). However, many employers do not utilize this flexibility as effectively as they could when outlining PTO policies in their employee handbooks.

For instance, there could be a rule providing that PTO is forfeited when an employee leaves the company or if a certain amount of notice is not given. Be sure to cover all important issues related to PTO, including how it is accrued, whether unused PTO rolls over to the next year, etc. By the same token, do not combine or confuse paid sick leave with PTO, because different rules apply to each. 

Omitting Procedures For Filing Complaints

While employee handbooks often say that complaints can be filed with the human resources department and/or a manager, consider providing other avenues as well. Many complaints are sensitive, and employees will be reluctant to file them if they fear retaliation from their manager or suspect that an HR representative will not be sympathetic.

For these reasons, it is a good idea to designate people in various parts of the company who are authorized to deal with complaints.

Including Too Much Information

While employee handbooks should explain all-important company policies and procedures, it is possible to be too comprehensive. No handbook can address every conceivable situation and should not attempt to do so, in part because updates will be numerous and burdensome.

Plus, employees will decline to read or will not remember an excessive amount of information, and they are likely to miss policies on discrimination or other critical issues if they are buried in other materials. Finally, it is advisable to leave room for deciding some issues based on the specific facts, which often produces a better result for all concerned.

Outlining a Discipline Policy

Although many employee handbooks provide the exact procedures that will be followed to discipline or terminate employees, this is generally ill-advised because it can lead to discrimination lawsuits if the procedures are not adhered to in a particular case.

There is no real benefit to including discipline policies in an employee handbook, and such policies may bind employers in ways they did not intend. That said, it is a good idea to list specific behaviors that will result in immediate termination, as this can provide legal protection for the employer later on.

Contact Counxel Legal Firm

There are other mistakes to avoid in employee handbooks. If you would like to talk to an attorney about what an employee handbook should contain, contact us at (480) 744-6621 or at request@counxel.com. Don’t forget to check out the good things that others are saying about the services they received from Timothy Coons on Google.

This article is intended for informational purposes only and does not constitute legal advice for your specific situation. Use of and access to this article does not create an attorney-client relationship between you and Counxel Legal Firm. Please contact request@counxel.com or (480) 744-6621 to request specific information for your situation.

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