The most commonly overlooked clauses that could land your business in trouble.
There it is, 50-odd pages neatly collated in a white plastic binder: your employee handbook, a labor of love, the rules of the road and possibly your legal protection in case of future conflict.
Of course, there won’t be any conflict because you have spelled out in exhaustive detail every aspect of the company culture, how things are done and what is expected. Or have you? Even the most thorough employee handbook is apt to miss something, and it could be something crucial. Here are some of the most commonly overlooked clauses:
1. Acknowledge receipt.
It’s hard to enforce rules that an employee has never read. That’s why every handbook needs to include a clause, which employees sign, stating they have received and read the handbook. “This signed document should be included in the employee's personnel file in case there’s a disciplinary issue later on. The employee can’t say ‘I didn't know about that policy’ if you have something in writing,” says Amanda Haddaway, director of human resources and marketing for Folcomer Equipment Corp. in Frederick, Maryland.
2. Wear it well.
“The dress-code policy is typically something that is not considered important enough by small business owners to include in their employee handbooks. Unfortunately, as they hire more people, they soon realize just how important it is,” says Heather Post, founder and director of The Etiquette Seed, a civility, ethics and professionalism consultancy in Daytona Beach, Florida. Post ran into this situation with a client: “She hired someone to do her social media and marketing. The employee went and got one piercing and then another and then a few tattoos. The owner says that the employee does an amazing job but she is now uncomfortable having her (visually) representing her business anymore--and she is in a tight spot. A dress-code policy from the beginning would have alleviated any confusion as to what was expected or acceptable for that position.”
RELATED: Dress Code Do’s and Don’ts
3. Leave yourself an out.
“It is crucial that employers clearly state in their employee handbook that ‘We reserve the right to change the policy at any time,’” says Neil S. Maxwell, a partner at the White Plains, New York, law firm of Kurzman Eisenberg Corbin & Lever. You’ll need to put future changes in writing, but this clause gives you the basic right to make those changes. Employees should know that you always maintain the right to set the rules that you, the owner, find appropriate.
4. Lunch break.
While time for a sandwich may seem obvious to some, the rules still must be spelled out. “It is important to make lunch-time breaks a clear policy,” says Maxwell. Lunch laws vary from state to state, and you may need a lawyer to comply with each version. In New York State, for instance, employers have to provide meal breaks but are not required to pay workers for that half-hour--unless workers are required to eat at their desk to answer the phone. The Department of Labor can help employees gain back pay for lunch breaks that should have been compensated, but a clear written policy will help an employer mount a defense.
5. Training payback.
An employer can spend a lot of money on training, which may be good for the business, but what’s to stop an employee from picking up those shiny new credentials and going elsewhere? Probably nothing, but you can at least get your money back. Through a mandatory employment commitment, or payback clause, an employee commits to stay with the company for a given length of time or else repay the training, says Chuck Gumbert of The Tomcat Group, an interim executive management and consulting company. For firms investing heavily in training and education, a payback clause can be a valuable safeguard.