Suppose your organization decides to alter its retirement plan. You shoot out an email about the change, but fail to secure written proof that employees have read and understand the modifications.
Three months later, an employee retires based on promises made in the old retirement plan, resulting in lost pension dollars. He sues, saying he never got wind of the retirement-plan change.
You might be out of luck, and it could cost you big bucks. Former employees have successfully sued in similar circumstances, alleging breach of contract.
Whenever you update the material terms of your, you should collect written or electronic acknowledgments from employees attesting that they received and read the latest changes.
Here are five tips for securing acknowledgment of benefits changes:
- Paper or digital? Require acknowledgment either way: through a signed paper form or by sending an email that requires some type of electronic recognition.
- Include the usual four-point disclaimer. Yes, it’s the standard disclaimer that goes on everything that comes from HR: The worker remains employed at will; nothing new in the benefits documents creates a contract; the employee understands that he or she can ask any question about the change; nothing in the new terms changes the nature of the employee’s relationship with the employer.
- Be wary of any kind of verbal acknowledgment. Memories can fade and people leave your company. Even your notes of those oral OKs could be challenged in court. Paper or electronic records won’t be.
- When in doubt, request an acknowledgment. Benefits changes that have financial consequences absolutely demand acknowledgments, but you should play it safe. Request acknowledgments for any change that could conceivably come back to haunt you.
- Retain those acknowledgments for at least three years after an employee leaves. That creates an audit trail to prove employees knew about a new policy and you did everything you could to inform them.