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Employee Handbooks: 7 Potentially Costly Mistakes

By / August 12, 2014 / Uncategorized No Comments

Employee handbooks are important, but when not properly executed, they can pose, rather than prevent, costly issues for an employer. When you put an employee handbook together, you need to ensure that you’re not setting your company up for legal problems down the road.

Consider these seven common employee handbook mistakes you should work to avoid.

Omitting Essential Policies

It may seem obvious that your company won’t tolerate harassment at work, but Jim Grove, head of the employment law practice at Nicola, Gudbranson & Cooper LLC in Cleveland, says he often sees companies forget to include a solid harassment policy with a clear procedure for employees to report issues of harassment and discrimination in their employee handbooks. When drafting your handbook, leave no one guessing about the company’s position against harassment, or the duty and mechanism to report it, he says.

Grove says he also often sees companies forget to include overtime and timekeeping policies in their handbooks. “A clear overtime policy that prohibits working unauthorized overtime, and creates a safe harbor for employers against losing an exemption for an employee by providing employees with specific instructions on how to report timekeeping or deduction issues they believe to be improper.”

Using too Much Legalese

While it’s important to cross your t’s, the language you use must also be easy to comprehend and follow. “Employee handbooks are generally so full of legal jargon that employees don’t read them,” says organizational consultant and leadership coach Joanie B. Connell.

Connell says she’s worked with companies that have detailed policies in their employee handbooks that neither managers nor employees use. “The policies are either too cumbersome to follow or the politics of the organization scares people into not using the policies.”

Adding Too Many Details

Details can help clarify, but they can also trap employers by not allowing for other possibilities, especially when it comes to discipline. “While the employer should clearly state the unacceptable conduct that will be subject to discipline, the employer should avoid making this list exhaustive and reserve the right to discipline employees at its discretion,” says Beth Zoller, legal editor at XpertHR.

She also recommends avoiding words such as “must,” “will” and “shall,” which “can obligate the employer to certain procedures and create an expectation of rights on the part of employees or unintentionally create a contractual duty on the employer’s part.”

Including a Noncompete Agreement

If you want employees to sign a noncompete agreement, it should be a separate document, says Braden Perry at Kennyhertz Perry LLC. “Employers need to ensure that the handbook does not contain any employment agreements that should stand alone and apart from the employee handbook, including noncompete agreements and confidentiality agreements. There have been numerous situations where the noncompete was denied because of this.”

Failing to Get Employee Signatures

To mitigate the company’s risk, it’s essential to have employees sign to document they’ve received a copy of the manual. “Make sure it acknowledges receipt of the correct employment manual,” says attorney Scott Behren, especially if your handbook has gone through revisions. “Sometimes the version of manual does not match up with what employee signed as having reviewed.”

Ignoring Tech Policies

Include rules and regulations about Internet use and social media in your employee handbook so employees know what to expect, Behren says. This includes who social media accounts belong to. For example, if an employee is tweeting under her own name or a version of her name on Twitter on behalf of the company, does the account belong to her or the company?

Failing to Follow Up

It’s important to review handbooks and policies periodically, Grove says. “Companies change, lines of business change and workforces change. The policies and procedures that are put in place today may not fit the realities of the business down the road.”

Companies must also be sure to train managers on the information in the handbook and how to apply it in real-world situations, says Leslie Austin, an HR representative at HR Solutions. Without adequate training, you risk having managers violate the policies set forth in the handbook or take inappropriate action based on them.

You may also want to have a human resources professional or attorney review your handbook and any edits you make over time to ensure you aren’t making other mistakes that could land your company in legal trouble.

If you need help creating an error-free employee handbook for your company, we’re here for you. Contact us to learn about our affordable, expert advice.

HR Solutions is a human resources outsourcing firm based in Baton Rouge, Louisiana. We eliminate human resources headaches for businesses with 10 to 1,000 employees by handling their payroll, employee benefits, regulatory compliance and other staffing needs. Contact us to learn how we can streamline your company’s human resources function to save money and reduce risk.


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