An employee handbook often goes from being useful to advisable
and necessary once a company reaches the threshold of approximately twenty employees. A growing company's need for a
uniform application of policies and procedures justifies the time, effort and expense required to create such a handbook.
It is often the case that many companies have a collection of employment policies created overtime that constitute an "informal"
handbook before they decide to publish an official employee handbook. The main drawback to adopting an
employee handbook is that it forces the employer to commit to dealing with situations in specific ways, thus limiting discretion.
However, such a limitation is not necessarily a negative. The adoption of an employee handbook can encourage consistency
of treatment among employees and can reduce the risk of unlawful discrimination claims. Confusion about unstated policies
and benefits can lead to employee morale problems, union organizing efforts, and lawsuits against employers. Termination
and discrimination lawsuits are often based on claims that the employer acted arbitrarily, or singled out an employee for
unfavorable treatment that was inconsistent with the treatment of other employees.
Publishing written
policies in an employee handbook makes decisions based on those policies more credible. In addition, a well-drafted
employee handbook will provide for the employer's right to deviate from the stated policy in appropriate situations thus providing
the employer with some flexibility when dealing with employee issues.
A benefit to adopting an employee
handbook is that it helps new employees understand the company's policies, procedures, and benefits. It also operates as an
informational tool to educate supervisors and managers of the company and is an available resource to use in resolving employee
complaints about policies and conflicts over procedures. Thus, employers usually find that there are more advantages
in adopting an employee handbook than there are disadvantages. Once an employee handbook is adopted, employers should ensure
that the company policies as they are set forth in the handbook are followed. Failure by the employer to follow policies
or procedures in its employee handbook can result in employer liability that could have been avoided. At a minimum,
any deviations from written company policies must be adequately explained to a jury or arbitrator in employment litigation.
Thus, employers should make sure that the employee handbook actually reflects the company's current practices and procedures.
Often, employers fail to follow policies because they think that the policy is outdated, either because the
law or the employer's business has changed. This highlights the need for periodic review and revision of the handbook
as circumstances warrant. Many companies have now opted out of publishing written employee handbooks in favor of publishing
policies and procedures online. Generally, this allows companies to update their handbook easily and more frequently
and helps ensure that the handbook accurately reflects the company's actual policies and procedures. In addition, the
ability to announce revisions to policies and procedures via e-mail helps ensure that all employees receive timely notice
of any new or modified policies.
