Tuesday, Dec 13, 2016

A Virginia Business Owner’s Guide to Drafting an Employee Manual

Employee ManualTwo questions frequently asked by our Virginia business clients concern the importance of an employee manual and who should draft it. There is no doubt that if you have more than a few employees, a well-written employee manual can effectively communicate your workplace policies and help you reduce the risk of a lawsuit.

While employment in Virginia is considered at-will, meaning either party can decide to end employment for any reason or no reason, business owners who employ a certain number of employees must be aware of, and comply with, federal and state laws designed to protect against unlawful termination practices. By providing each employee with an employee manual, an employer can be sure its employees know in specific terms what is expected of them. Keeping the manual up to date (and, most importantly, consistently abiding by it) minimizes an employer’s exposure to unlawful termination claims, wage claims, and other employment-related litigation.

No manual is able to cover every policy consideration, and it’s best to make this clear to your employees by saying so in the manual. Along the same lines, it’s important to give yourself flexibility to add to, or subtract from, the manual’s written policies on an as-needed basis. Perhaps just as important as what should be included in the manual is what should not. Here are a few categories of what not to put in your manual:

  • Unconditional Promises. Unless you want to create an employment contract that obligates your employee to work for you for a fixed period of time, thereby taking the employment out of the at-will category and limiting your right to fire the employee for the same period, don’t include language that promises employees a job as long as they are not in violation of the rules, or refers to any employee’s position as “permanent.” Similarly, even referring to new hires as “probationary employees” can get employers in trouble, because the term “probationary” can create an expectation that the employee’s status will change after he or she completes the period. Because a court might interpret these scenarios as contracts of employment, preventing you from firing your employees without good cause, the language in the manual must be chosen carefully.
  • Detailed Disciplinary Practices. While it is not uncommon for employers to want to follow some form of progressive discipline for performance problems or misconduct on the job, employers need to be careful when crafting discipline policies. If an employer adopts an overly descriptive and/or restrictive discipline policy (such as starting with a verbal warning, followed by a written warning, followed by a probationary period or suspension, then termination for subsequent problems), this unnecessarily binds the employer to a much more stringent and time-consuming process. Such a restrictive discipline practice will make it difficult for the employer to deviate from the process without claims of unfair treatment. Don’t obligate yourself to follow a particular disciplinary pattern for every employee in every circumstance. If you do, you may find it difficult to fire an employee for gross misconduct. A good disciplinary policy should keep the employer’s options open. And never promise “due process” or anything similar for disciplinary actions or grievances.
  • Employer-Provided Benefits Policies. Overly detailed policies concerning employer-provided benefits can be troublesome because they tend to become too complex. With all the detailed information contained in group insurance policies and the overlap of state and federal leave laws, employer-provided benefits should be only generally summarized in the manual. Employees should be referred to management or human resources for full plan details. When these policies are too detailed, they run the risk of misstating or omitting important facts, resulting in potential problems for the employer.

While no single article can address all of what should and should not be included in an employee manual, it is important to have a competent employment lawyer perform a thorough review of your employment policies to ensure they meet the legal requirements for your business practice. Because no two companies are alike, and no company is like yours, searching online for a template or borrowing a manual prepared by another company is risky at best. The size and type of business and the ever-changing landscape of state and federal laws make it essential for each business owner to tailor its employee manual to its business operation.

Our firm has helped businesses draft employee manuals from start to finish and provided a thorough review and updating of existing manuals to ensure they meet legal requirements. We recommend periodic (at least annual) reviews to ensure the policies are current and valid. Continuing to use out-of-date policies is just as dangerous as inconsistently applied policies.

To get help with your company’s employee manual, or to ensure it is in compliance with Virginia employment law, please contact Wendy Alexander.