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Crafting an Employee Handbook (Part 1)

Documenting policies, explaining expectations can help avoid ‘HR drama’

CHICAGO — An employee handbook clearly states what the business expects of an employee, as well as the employer’s legal obligations, protecting a small business like a self-service laundry against employee lawsuits and claims.

It serves to prevent misunderstandings and dissatisfaction that can lead to what Karen A. Young describes as “HR drama.”

Young, SPHR, SHRM-SCP, is a veteran human resources professional and author who’s beginning her 16th year as president of HR Resolutions. Her Pennsylvania-based firm supports small businesses like self-service laundries on a national basis.

“We’re advocates for the organization so (it) can have employees but we have to be advocates for the employees also so that the work of the organization can get done,” she says.

DOES WORKFORCE SIZE MATTER?

The size of a small-business workforce plays a factor in how it’s regulated and can influence how far a business owner must go when it comes to documenting and communicating HR responsibilities, Young says.

“If it’s just a handful of people, I mean two or three, I don’t know that you need to go to the investment of having a formal handbook put together, depending on what state you’re in,” she says. “There are certain regulatory guidelines that you’ll need to follow.”

For example, in her state, if a company employs four or more people, it must follow the Pennsylvania Human Relations Act, which Young says is similar to the Equal Employment Opportunity Act at the federal level, which comes into play when a workforce reaches 15 employees.

“If you don’t have a whole handbook, you want to have a few key documented policies. For example, an equal employment opportunity policy. ‘How am I going to determine whether I hire someone or not? How am I going to select the individual? How am I going to make decisions about terminations?’”

You want to have at least minimal guidelines on record to minimize your risk and exposure of being sued, Young says.

A handbook also gives your employees, in writing, your expectations for their performance.

“Naturally, you should still communicate your expectations to them, but I take handbooks one step further,” Young says. “I let the employees know in the handbook what they can expect of me.

“‘If you have a challenge, I want you to come talk to me, because I want to try to work it through with you. You can trust that you can have a safe conversation with me. I will treat you fairly. I will treat all of our employees the same.’ So I am letting them know what they can expect of me (as their employer) as well.”

AREAS TO COVER

“Generally, you want to start out with a welcome. I’m not an attorney but I can assure you that any attorney will reinforce this: You really need to put it in writing that you are an ‘at-will’ employer if you are in an ‘at-will’ state.”

At-will means that an employer can terminate an employee at any time for any reason, except an illegal one, or for no reason without incurring legal liability. Likewise, an employee is free to leave a job at any time for any or no reason with no adverse legal consequences.

“I think the next thing you want to talk about is … the regulations and the things that are applicable. Employment. Talk a little bit about wages. Definitely—particularly in your industry—talk about overtime. Make sure you define overtime.”

Most states stick with the federal definition, with overtime kicking in after 40 hours per workweek, Young says.

“But you have to remember to define what ‘work’ is. Does that include any holidays? Does that include any paid time off?”

If you’re going to include a holiday section, whether you treat them as paid or unpaid, make sure you carry the definitions through so you’re reinforcing it throughout the handbook, she says.

“After regulations, I’m going to go into benefits. And when I say ‘benefits,’ I don’t just mean medical, dental and vision. I don’t mean the typical. Are you going to offer discounted laundry? Are you going to offer free laundry services? Are you going to offer discounted dry cleaning? That’s a benefit to an employee.

“Do you offer a flexible schedule? … If you have a policy that employees will have every other weekend off, that’s a benefit. Think about all those things you offer that are available only because they’re a part of your family.”

Make sure you publish your pay frequency (biweekly on Fridays, for example) and explain what an employee should do if they discover an error in their paycheck.

Writing for American Coin-Op in 2017, multi-store owner Brian Brunckhurst said a good employee handbook specific to laundry operations should contain a welcome letter; important contact numbers; a detailed job description; operating instructions for each type of washer and dryer; your customer service policy; daily duties, policies and procedures; and a summary of employee benefits.

Young doesn’t favor including procedures.

“I want to caution, you want to be sure you’re not putting procedures in an employee handbook. Policies are going to remain relatively consistent and stable across time. It’s very rare that your policy on how you define overtime is going to change. But your procedure for ringing a customer out or providing change, that might change regularly. That’s why you want to be sure to keep the two separate.”

If you’re distributing a handbook for the first time, or distributing an updated handbook, make sure each employee signs an acknowledgement form upon receipt, Young says.

“And even if your handbook is online, which is the way a lot of these are going now, make sure there’s some type of signature (from the employee) acknowledging, ‘I know where it’s located and I understand I’m responsible for it.’”

If possible, have your employee handbook translated into Spanish and perhaps other foreign languages widely spoken in your area. If that’s not possible, make sure you have an interpreter (a staff member?) available on the day that you review the handbook with employees.

“The more we demonstrate that we are pro-employee, that further mitigates our risk as well,” Young advises.

The coronavirus pandemic created an unusual work environment for many in 2020. Businesses haven’t necessarily updated their employee handbooks because of it, she says, but instead have issued addendums specifying additional policies.

Check back Thursday for the conclusion!