10 Handbook Mistakes That Could Land Your Small Business in Hot Water – Part I
You’ve been told you need an effective employee handbook as a small business. CPR highly recommends that any business with at least one employee have a handbook as a one-stop location to help establish clear expectations, set the foundation for a positive workplace culture, and demonstrate to employees that you are applying a consistent set of policies and procedures.
But beware - your handbook can be a double-edged sword. Certain inclusions could actually expose you to legal risks. In this two-part blog post, we'll share the 10 things you should think twice about before adding to your employee handbook.
General Tone
Strive for a positive and constructive tone as you write your handbook. While it's important to address potential consequences, maintaining a positive tone encourages collaborative workplace. Overemphasizing punitive measures such as saying termination is the only consequence of any and all violations can create a negative workplace culture. Focus on:
Educating about your business’ expectations and procedures.
Improving if the employee engages in faux pas.
Emphasizing teamwork toward course correction and accomplishing goals.
To learn more about why an employee handbook is critical and what TO include, see our previous blogs, “Employee Handbook Ease for Small Businesses – Part I” and “Employee Handbook Ease for Small Businesses – Part II.”
Mistakes to Avoid
1. Promises of "Permanent" Employment
You might be tempted to offer assurances of long-term employment in the excitement of building your dream team. But, including phrases like "permanent employee" or "job security" can weaken your at-will employment status. This could make it harder to part ways with employees if needed, potentially putting your small business’ survival at risk. Montana is the only U.S. state that does not have an at-will law. At-will means that you or an employee can separate from each other without explanation. At-will does not mean that employers have the right to wrongfully or illegally terminate employees.
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Instead: Clearly state that employment is at-will (where applicable) and avoid any language that implies long-term job guarantees.
2. Overly Rigid Disciplinary Procedures
While it's crucial to outline important procedures, avoid overwhelming your handbook with excessively detailed steps that may become outdated quickly. Provide just enough information to guide employees without bogging them down. Specifically, a step-by-step disciplinary process can box you in. In an evolving small business environment, you need the flexibility to handle each situation uniquely. An example is to avoid inflexible attendance policies. A strict attendance policy may hinder collaboration and trust.
Instead: Maintain flexibility to address unique situations appropriately and fairly. Outline a framework or general guidelines for addressing performance issues but maintain that the company reserves the right to adjust its approach based on circumstances. Refrain from requiring a doctor’s note for every sick absence. Set parameters instead such as requiring a doctor’s note for sick absences more than a certain number of days.
3. Excessive Details on Benefits
Your small business benefits package is likely to evolve rapidly as you grow. Including too many specifics in your handbook means you'll need to update it frequently, which can be time-consuming and may lead to confusion if outdated versions circulate.
Instead: Provide a separate document or access to an internal company intranet with a general overview of benefits. Offer clear explanations of each benefit to ensure employees fully understand what is available to them.
4. Blanket Confidentiality Policies
While protecting your small business’ intellectual property is crucial, overly broad confidentiality policies can run afoul of labor laws. The National Labor Relations Act (NLRA) protects employee rights to engage in “protected concerted activity” (with another employee or by themselves) encouraging an employer to act regarding terms and conditions of employment. Confidentiality policies can inadvertently violate an employee’s rights under the NLRA by including policies mandating employees to refrain from speaking about their pay, working conditions, safety concerns, or even posting about these items on social media. For example, shutting down employees discussing their pay verbally or even on social media is in violation of the NLRA.
Instead: Be specific about what information is considered confidential, focusing on business information such as trade secrets, intellectual property, data, and proprietary information should be the focus.
5. Strict Social Media Restrictions
In today's digital world, your employees are likely to be active on social media. Overly restrictive social media policies can not only breed resentment but may also violate the NLRA protecting employees' rights to discuss work conditions as discussed above.
Instead: Focus on guidelines for responsible social media use. Clearly define what constitutes business confidential information (not to include pay, working conditions, or safety concerns) that shouldn't be shared and to avoid defamatory or offensive content that may violate your anti-harassment policy.
Conclusion
Creating an employee handbook that strikes the right balance is critical for small businesses. Remember, your employee handbook is a living document that is going to evolve with your business. We will discuss the next 5 items to exclude from your employee handbook in next week’s blog post.
Disclaimer: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information.
