There are many factors that enter into the decision of when the time is right for a company to produce and distribute an employee handbook. Some of these factors include:
1) Company Culture – Are you proactive? Are you a risk taker?
Many companies in the start-up or earlier phases of maturity think that employee handbooks are only for “big, bureaucratic companies”. This is a fallacy. A small company that introduces a handbook before a growth spurt will mitigate risks and save time. It is best to document and communicate expectations and policy parameters; such as how paid time off is handled, before it becomes an issue or concern.
Many US employment law covers employers with 1+ employees. Where there is a law, there is a risk of a lawsuit. A proactive small company realizes this and understands that the presence of a well-written handbook is a measure that can lower the risk of employment law litigation. For instance, listed below are some employment laws, which apply to companies with between 1 and 100 employees (please note, this is by no means an exhaustive list):
- Employers with 1+ Employees:
- Fair Labor Standards Act (FLSA) – overtime, minimum wage, exemption status
- Immigration Reform & Control Act (IRCA) – requirement for I-9 forms for all employees
- Equal Pay Act
- Uniformed Services Employment & Re-employment Rights Act (USERRA)
- Uniform Guidelines for Employment Selection Procedures
- Washington State Employers with 8+ employees:
- Washington State Law against Discrimination
- Employers with 15+ Employees:
- Civil Rights Act of 1964 & 1991
- Pregnancy Discrimination Act
- American with Disabilities Act and 2008 Amendments to the ADA
- Genetic Information Nondiscrimination Act (GINA)
- Employers with 20+ employees:
- Age Discrimination in Employment Act of 1967
- Consolidated Omnibus Budget Reconciliation Act (COBRA)
- Employers with 50+ employees:
- Family Medical Leave Act (FMLA)
- Employers with 100+ employees:
- Worker Adjustment Retraining Notification Act (WARN)
- Employers with Federal Contracts:
- Executive Order 11246 – Affirmative Action Plan (50+ employees and $50,000 in government contracts)
- Vietnam Era Veterans’ Readjustment Assistance Act ($25,000+)
2) Type of Labor
The type of labor the company employs is another factor that can help determine the right time to introduce an employee handbook:
- Employers with nonexempt employees have legal obligations under the Fair Labor Standards Act (FLSA) and benefit by introducing an employee handbook, including an overtime policy, early on.
- Employers with employees in diverse locations may have different obligations under different state laws and benefit by defining those requirements in their employee handbooks during the earlier stages of growth.
- Employers with virtual employees do not typically have opportunities for frequent, face-to-face interaction. These employers benefit by introducing a handbook so that there is a written “virtual” source for employees to tap into for clarification of policies and behavior expectations.
- Employers with diverse workforces who may have English as their second language or come from cultures where employers have different expectations will benefit by having a written handbook to consult and convey a clearly defined, consistent message.
3) The Exception is Becoming the Rule
When a company looks at how it is handling a particular issue, say vacation leave, and realizes that people were given all sorts of different amounts at hire, told different things about how much they could use and whether it would be paid out at termination, etc. the company may realize that the lack of written and consistently communicated policy is creating havoc. This is a good time to introduce a handbook so the company has an opportunity to get everyone on the same page going forward and people feel that the company is running a consistent, efficient operation. Having issues and expectations spelled out can also free up the employee to spend more time doing their job and less time worrying that the company is treating them unfairly or differently than other employees.
4) Too Much Time is Being Spent on Answering Questions
When policy questions are sucking up time that would be better spent on bringing revenue to the company, it is time to introduce an employee handbook. While a handbook is certainly no substitute for face-to-face interaction between management and employees, it is another useful reference tool that can be accessed and referenced at any time by the employees or the management who is trying to answer a policy related question.
What should your employee handbook cover? Find our here.