DON’T THROW AWAY THE PLAYBOOK: THE EMPLOYEE HANDBOOK

By Jeff Wolfe

jeff2We spend a lot of time thinking about our clients, especially our small, early-stage businesses.  Many of these, particularly the boot-strapped startups, tend to make decisions primarily or solely based on their costs.  Sometimes, as their businesses evolve, circumstances just sneak up on them, and, in the area of risk management, they find themselves exposed due to simple neglect.

It’s easy to understand, but we believe it’s our responsibility, nonetheless, to keep reminding these great folks to pay attention to certain areas of their businesses where risk can develop rather quickly or over time.  Areas that come to mind that can bite the business owner quickly are things like not being properly incorporated to protect personal assets, as well as getting some proper contracts in place for dealing with even your very first customers.

An area that can evolve over time, especially when you’re starting out on your own, as a mom-and-pop, or as a group of co-owners, is that of employment.  You can look up one day, and all of a sudden, you’ve grown from a tight-knit group of three close friends to a larger circle of people—even if it’s still less than 10—that more closely resembles the diverse loyalties and backgrounds of a much larger company.  Many companies find this day comes much sooner than later, as they are blessed with early-stage growth.  That’s why it’s never too soon to visit getting an employee handbook in place—yes, even among friends.

The employee handbook will set the tone, serving as the foundational policy document for your company’s human resource function—no matter how large or small it ebbs and flows—for years to come.  Specifically, an employee handbook can clearly articulate your company’s expectations and potential consequences when your company’s policies and procedures are violated.  These aren’t static documents—they should be revisited periodically, ensuring that they are properly updated to protect the company’s risk profile at the given time.

So what should an employee handbook cover?  In simple terms, everything that affects them.  For a small business, that’s a much simpler proposition, and for virtual companies, simpler still, when you think of some of the issues that larger, office-bound companies deal with routinely, such as complex benefit plans and dress codes, which should be very plainly outlined within a handbook. Still there are quite a few issues that transcend all companies, no matter their size or structure.

Examples of universal or at least near-universal handbook entries include general employment policies, payroll practices and compensation, health and safety, and time away from work and employee leave.  Any benefits provided to employees, including paid time off, insurance, retirement plans, wellness, or any other types, should be clearly expressed as well for all to see.

An employee handbook should also address specific on the job policies, including attendance policies and standards of conduct.  And in adapting to our modern, technology-driven times, companies are addressing appropriate use of computers and social media sites by employees as well.

The key with employment law, as with any other aspect of corporate risk management, is for businesses to stay as proactive as they possibly can. It really is never too early to consider laying the foundation for the future with a proper set of human resource policies.  Too many entrepreneurs have worked too hard to build great businesses, only to see lack of proper planning on the HR front leave them exposed to a costly lawsuit from an employee or contractor.

An employment law attorney, in conjunction with a human resources professional, can ensure that you have the proper risk management strategy and policies—including an employee handbook —in place, whether you’re just getting started or need a review of a mature set of guidelines.