Thursday, July 7, 2011

Lesson #60: Importance of Employee Handbooks

Following my previous lesson on Determining Employee Benefits For Your Startup, I thought we would talk about the importance of having a well-written employee handbook, a step which is often forgotten about in the early days of getting a startup off the ground.

First of all, what is an employee handbook?  It is basically the "rules of engagement" for all employees of the company.  It clearly lays out key employment policies, expected employee conduct, expected hours and compensation policies, company operations policies, leave of absense policies and employee benefits policies.  I will try to summarize the guts of an employee handbook below.

Employment policies deal with topics like equal opportunity employment, employing disabled persons, classifications of employment, treatment of personnel files, employment references, employing family members, restrictions on outside employment, performance evaluations, promotions and advancements, and termination process, to name a few.

Expected employee conduct deals with topics like anti-harrassment, violence, health and safety, no weapons, accidents, keeping the office drug free, romantic relationships with staff, appearance, personal calls, restrictions on use of company resources, internet code of conduct, smoking and complaint resolution procedures, to name a few.

Expected hours and compensation policies deal with topics like hours of operation, payday, automatic payroll deposits, absentism, tardiness, emergency closing, time sheets, overtime, and wages and salaries, to name a few.

Company operating policies deal with topics like travel, gifting, use of company vehicles or assets, and no solicitation rules, to name a few.

Leave of absence policies deal with topics like family and medical leave, continuation of benefits, military leave, education leave, public service leave, bereavement leave, jury duty and workers' compensation, to name a few.

Employee benefit policies deal with topics like national holidays, vacation days, sick days, personal days, voting days and other company benefits, to name a few.

This document serves to: (i) communicate the company's policies to the entire staff; (ii) create a formal paper trail, upon execution by the employee confirming they have read, understood and agreed to such policies, in case there are any employee issues down the road; and (iii) creates a formal defense for the company, in case you or your staff are ever accused on not treating employees fairly, or implementing actions not previously communicated.

So, your lawyer should be able to help you with a good template handbook.  But, if you want to look at an example, I am happy to send you one for your review.  Long story short, clearly document all company policies and expected "rules of engagement" to protect yourself, and make sure all staff members execute an agreement acknowleding their receipt, review and understanding of such handbook.  It will save a lot of unnecessary heartache down the road, in case any employee issues develop over time.  And, as your employee policies change, which they may from time to time, make sure to send out a revised handbook to all employees, and get them to sign their acknowledgement of the amendments.

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