02/ 04/ 2007
by Beth Gaudio
Why you should put your company policies in writing
We've all heard "It's company policy." Employee handbooks are thick volumes used only by large corporations, right? Wrong. Businesses of any size can benefit from having written policies.
Myth: Written policies only increase an employer's legal liability.
Fact: Some states regard an employee handbook as part of the employment contract. Precise language and effective disclaimers can minimize the employer's legal risk. The principal advantage of having policies in writing and in a central location is that everyone knows what the rules are and where to find them. Of course, actions must match intentions. A court will look closely at a handbook's words and the employer's actions.
Myth: Business changes quickly, so it's better not to be tied down to a rulebook.
Fact: Employee turnover is all the more reason to have an employee handbook in place. Whether you're welcoming new employees, transitioning others into new roles or dealing with separations, everyone needs to know the policies. If you feel tied down by your current policies, then it's probably time to review and revise those policies.
Myth: The policies that we had when we started the business are still good.
Fact: Employers need to look forward. It's useful to know which policies worked well in the past, but what challenges does your business face today? As the composition of your workforce changes, you need to consider both the dollar-and-cents cost of insurance policies and the hidden costs of outdated performance guidelines.
Myth: Having written policies and codes lowers employee morale.
Fact: Written rules can motivate employees. Not only does everyone know what is expected, but everyone is treated equitably. Including sections on promotions and raises in the employee handbook can provide incentives for employees to continue working hard.
Myth: It's impossible to cover everything or know where to start.
Fact: You already have an employee handbook in your existing personnel policies, both written and unwritten. NFIB members have access to an exclusive member benefit from the NFIB Legal Foundation that will help you get started. Download your copy of a Model Employee Handbook for Small Business in the "NFIB Legal Compliance Guides" section of www.NFIB.com/legal. The model handbook covers essential topics such as the company overview and offers advice for setting policies on harassment, benefits, pay, performance and discipline; and the employee's acknowledgment of receipt of the handbook.
Beth Gaudio is senior executive counsel with the NFIB Legal Foundation, www.NFIB.com/legal. This article is intended to provide general information for reference only and should not be considered legal advice.
