7 things that should never go in a handbook

November 11, 2008 by Sam Narisi HR Legal News
With some commentary by Randall Barker SPHR CELS (in italics)

Mostly, it comes down to the choice of wording. Phrasing policies the wrong way often causes big legal trouble when managers discipline or fire employees.

Here are seven big problems all companies need to watch out for, according to HR consultant Hunter Lott:

1. Illegal overtime policies — A statement that shouldn’t appear in any handbook: “Authorized overtime will be paid at 1.5 times the regular hourly rate.” That policy is illegal under the FLSA — all OT, whether its authorized or not, must be paid. You can have a rule against working OT without permission and discipline or even fire someone for it, but you still need to pay them.

The Department of Labor (the government entity that investigates overtime violations) believes a business knows everything that is going on at the work place. If managers and supervisors don’t know what is happening as far as hours being worked they need to find out, ignorance is not an excuse. A business cannot refuse to pay an overtime premium because the extra hours were worked but not authorized.

It is also wise to have strict rules concerning when an employee can punch in for the day and punch out at the end of the day. Make sure employees understand that they can’t punch in early and out late so they end up in an overtime situation at the end of the week.

2. Vague FMLA language — Policies on FMLA should lay out all of the law’s eligibility rules. Otherwise, employees who wouldn’t have qualified for leave may still be able to sue the company. Also, make sure you’re specific about how FMLA and paid time off intertwine. If employees are required to use FMLA and PTO concurrently, that needs to be in the handbook. If it isn’t, employees may argue in court that their 12 weeks of medical leave didn’t start until after their sick and vacation time was used up.

We strive to make sure that every one of your new employees receives a basic policy guide that explains FMLA leave and an employee’s rights in a clear and concise manner. We encourage clients to adopt the same language in their own policy guides.

3. Bans on salary discussions — The only logical reason for a company to ban talk about salary, Lott says, is that its pay structure is unfair and unlawful — which is a possibility employers certainly don’t want to raise. Also, such policies may run afoul of the National Labor Relations Act, which gives employees the right to talk freely about working conditions.

Often a business owner or manager feels that there is a compelling reason to pay “Bob” just a bit more than the rest of his co-workers who are doing the same job. There are “superstars” who might deserve a higher wage. If you decide to pay Bob a higher wage about all you can do is ask “Bob” not to brag about it, but you can’t discipline him if he reveals what he is making.

However, you can discipline someone who is charged with keeping payroll records secure if that person decides to make everyone’s pay scale public knowledge. A business would also have a reason to discipline a person who rifled a co-workers desk or work space to discover a pay stub and then made the co-workers wage public knowledge.

4. Unnecessary probationary periods — Specifying that new hires are on a 90-day probation is appropriate for union or government employees, who are protected from termination in some cases. But for any other company, it doesn’t make much sense. Most employees are at-will — which means they can be fired at any time for any legal reason. Giving everyone a probationary period might negate an employee’s at-will status once the 90 days are over.

We (A Plus Benefits) support telling a new employee that he/she is subject to a 90 day probationary period. However, if you are going to make this part of your policy guide make sure to clarify that a successful completion of the probationary period does not change the at-will basis of employment and does not create a contract for continued employment.

Don’t forget why we use probationary periods for new employees…to see if we want to keep them long term. Be brave enough to acknowledge that if there are issues at day 89, those issues will not go away at day 90 or 91. Don’t turn a probationary employee with issues into a regular employee with issues.

5. Rules that are too personal — Lott warns against handbook statements like, “Employees are prohibited from dating co-workers.” It makes the company sound like a babysitter and creates a serious enforcement headache. Employers will get a lot more protection from a job-related policy such as: “Any relationship that affects your ability to do your job may be a valid reason for firing.”

We suggest that you do have a statement in your policy guide that requires supervisors and managers who enter into a relationship with a subordinate to report the relationship to upper management.
The revelation of this relationship is not a reason to terminate either employee, it is however a good reason to seek additional help from an experienced HR professional or legal advisor.

Don’t ignore these types of relationships and walk blindly into a sexual harassment complaint. Consensual relationships can turn ugly for the employer when one of the two parties decides to end the relationship.

6. Salary offers that offer too much — Employees and their attorneys will try to interpret everything the company says literally — especially when it comes to money. For example, telling employees what their “annual salary” is when they’re hired could imply that you intend to pay them for an entire year, no matter what. Instead, the statement should read something like, “an annual salary of (blank), earned and paid biweekly, monthly, etc.”

We suggest that businesses should be in the habit of using a carefully crafted offer letter when new employment is offered to an applicant. A carefully crafted offer letter is a perfect opportunity to notify the new employee that employment is on an at-will basis and that there is no basis for employment other than at-will.

An offer letter should cover how an employee earns paid time off, what the maximum level of accrued time off is and how accrued time off is handled at the end of the employment relationship.
Please ask your assigned HR Advisor with some assistance in this area if you aren’t using offer letters at the beginning of new employment relationships.

7. Too many details — Sometimes, listing too many specific behaviors that warrant discipline can make it difficult to discipline for other issues. For example, if a dress code includes 35 things employees aren’t allowed to wear, there’s likely to be some resistance when a manager tries to punish someone for inappropriate dress that hasn’t been explicitly spelled out.

A policy guide – and by the way, don’t call your company document a handbook, in the past courts have ruled that calling your document a handbook creates a situation where the business loses flexibility. A handbook is viewed by the courts as more stringent than a policy guide.

It is our hope that when you have a properly crafted policy guide that you can spend less time worrying about this subject and then you can get back to business.

Randall Barker is the VP of Human Resources for A Plus Benefits, Inc.