Employee handbooks are an essential part of effective HR management. Handbooks are also an important risk management tool. Since employee handbooks are not required by law, organizations may determine the best method and most effective means to communicate important HR-related information to their employees. More and more, brokers realize that helping prospects and clients with their employee handbook is a great value-added service. What follows is also important to your agency’s handbook, too.

An employee handbook should help reduce risk by conveying:

  • Hours of work, including overtime
  • Paydays and paychecks
  • Leaves of absence (sick leave, vacation, PTO, bereavement, ADA, FMLA)
  • Benefits (ERISA, ACA, HIPAA, COBRA)
  • Complaints, discipline and terminations
  • EEO and safety guidelines
  • Work comp return to work

Aside from the need to tailor handbook sections to meet the requirements imposed by various states, other compliance factors include:

  • Industry specific policies and procedures
  • Having both union and nonunion operations
  • Governmental contractor or subcontractor
  • Having workers that telecommute or work in nontraditional workplaces

To enhance communication with workers with limited English language skills or visual or cognitive impairments, an employer may have all or parts of an employee handbook translated into native languages, create large type versions of the handbook, and/or to hold special meetings to review handbook contents.
An employee handbook presents an excellent opportunity to educate employees about the organization, its history and its origin. It also allows an organization to:

  • Identify company culture, vision, mission, goals and/or values
  • Establish a positive employee relations philosophy
  • Let employees know they are an essential and valued part of an organization
  • Instill in employees a positive and favorable attitude toward the organization

Make sure the messaging communicated by the handbook to employees, applicants, supervisors and third parties is the same as the messages communicated during hiring, orientation and performance management. Inconsistent messages cause confusion and may undermine one or more employment policies.
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An employee handbook should indicate on each page or policy the date of issuance. This helps establish when a policy, procedure, or program was created and track changes and revisions as they occur. As a general rule, employers should review the employee handbook annually; however, specific policies may need to be changed due to new laws or circumstances.

If an employer revises, adds, or deletes a policy, procedure, or benefit program in the employee handbook, a copy of the change should be provided to all employees. In addition, the date of any revision(s) should be indicated on each page or policy. A signed acknowledgment of receipt should be obtained and a copy placed in the employee’s personnel file. A common defense to employer disciplinary action is, “I didn’t know about that policy, rule, or regulation.” If an employer can conclusively demonstrate the employee received a copy of the handbook and agreed in writing to abide by its provisions, the employer will have strengthened its compliance position.

What brokers can do

All too many clients have employee handbooks that are poorly written, out of date and a compliance nightmare. Trusted brokers and advisers make sure clients check off all the compliance boxes. Their handbook is an essential risk management tool. Make sure it complies with the guidelines above and review any requirements expressed in their EPLI application. Brokers will also want to examine how the client is positioning its benefits and additional programs. Are they doing a good job of expressing their full value?

A carefully created and updated employee handbook is part of a great HR foundation. Remember, good HR is an essential part of every employer’s risk management program. As such, it is a key tool for brokers to strengthen client relationships and win new ones.

Phin is vice president of strategic business solutions at ThinkHR Corporation. He helps build partner relations as well as contributes to trainings, webinars and additional content development for the ThinkHR Workplace. An employment lawyer, Phin founded the HR That Works program that ThinkHR acquired in January 2014. In addition to his role at ThinkHR, Phin is the co-editor of the Employment Practices Liability Consultant (EPLiC) Journal, published by the International Risk Management Institute (IRMI), the author of numerous books and e-books, and a nationally recognized speaker on a variety of risk-related HR topics.

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