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Handbook Audits

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in Employment Law,Human Resources

If it’s been awhile since you last overhauled your employee handbook, you may be courting disaster. You should establish a regular revision schedule and update your handbook once a year or whenever significant statutory or other changes occur.

You don’t want your employees relying on outdated or even illegal policies. Plus, you may be able obtain lower rates on your employment practices liability insurance, which protects businesses from various kinds of employee lawsuits.

Handbooks must change with the times; those that gather dust on the shelf may be more dangerous than no handbook at all. That’s especially true if anything in your manual reinforces corporate cultural norms at odds with current discrimination laws. Outdated handbooks can provide ammunition even for otherwise futile lawsuits, and language from a bygone era may come back to haunt you.

Case in point: A female bank employee quit after 25 years because a male co-worker earned more than she did. She filed an Equal Pay Act (EPA) lawsuit and won. But that wasn’t all. Because the EPA allows employees to win double damages and an additional year’s back pay if they can prove the violation was “willful,” the former employee claimed the company handbook proved intent to discriminate.

She pointed to a policy that addressed scheduling problems for “ladies with children going to school” and another one that said employees couldn’t use sick leave for maternity leave. These policies, she said, reinforced a corporate attitude that men are more valuable employees than their female counterparts. Simpson v. Merchant and Planters Bank, No. 04-3972 (8th Cir. 2006)

When you prepare the current revision, plan ahead for later versions by stating in both the conspicuous disclaimer and the receipt/acknowledgment that you reserve the right to make changes to any of the handbook’s provisions.

Caution: What you exclude from your handbook can be as important as what you include. Employment lawyers recommend that you omit the following:

  • Instructions to managers.
  • An arbitration clause.
  • Details on benefits.
  • Policies on leaves of absence.
  • Details that change frequently.
  • Any policy that won’t seem enforceable.
  • Any promise you don’t intend to keep.

Keep the language in your handbook simple and the format readable. “Use plain English,” advises attorney Brooks Kubik. “If you don’t, people won’t read it.”

Have your lawyers review a draft of the handbook to make sure it’s a document that can help you avoid legal troubles, not invite them. Many federal employment laws, including the FMLA and ADA, require employers to distribute notices and policies in languages other than English when a “significant portion of workers are not literate in English.” (29 CFR §825.300) While this provision does not specifically apply to employee handbooks, it stands to reason that enforcing agencies (Labor Department, EEOC, etc.) expect employers to inform workers of their rights in a language they understand.

Recommendation: When issuing a revised handbook, make sure employees and supervisors discard their old handbooks and sign a receipt for the new one.

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