Employee handbooks can help employers communicate rules, benefits and other important information to employees. In the past, we have covered must-have policies for your employee handbook, but it is also important to know which policies to avoid. If your handbook isn't drafted carefully, certain policies may conflict with federal, state, or local law. Here are 10 policies to avoid.
Avoid #1: Withholding Final Pay Until Company Property Is Returned
Federal law requires employees to receive their final pay by the next scheduled payday. Many states have shorter timeframes, such as at the time of termination. Employers must meet final pay deadlines, regardless of whether the employee has yet to return company property.
Best Practice: Whenever possible, reclaim company equipment prior to the employee's last day. Depending on the state, employers may be permitted to make limited deductions from a non-exempt employee's final pay for unreturned equipment (these deductions are prohibited if the employee is classified as exempt), provided the deduction does not bring the employee's pay below the applicable minimum wage and does not reduce any overtime pay due. However, some states expressly prohibit deductions for unreturned equipment. Review your applicable laws and consider consulting legal counsel before deducting from final pay.
Avoid #2: Unauthorized Overtime/Early Punch-Ins Will Not Be Paid
Under the federal Fair Labor Standards Act (FLSA), non-exempt employees must receive one and a half times their regular rate of pay for all hours worked over 40 in a workweek (some states require overtime in additional circumstances and at a different rate). If a non-exempt employee has worked overtime, he or she must be paid an overtime premium, regardless of whether the overtime was pre-authorized. A policy that no overtime work is permitted unless authorized in advance doesn't relieve the employer of this requirement. Similarly, employers may not withhold pay for time worked if the employee punches in before his or her scheduled start time.
Best Practice: Employers may subject the employee to disciplinary measures for working unauthorized overtime, but in no case may the employer withhold overtime pay.
Avoid #3: Requiring a Doctor's Note for Every Sick Day
Most leave laws allow employers to ask employees for reasonable documentation of the need for leave. However, certain laws do have restrictions. For example, some state and local paid sick leave laws prohibit employers from requesting documentation unless the employee has taken sick leave for more than three consecutive days.
Best Practice: Even in the absence of a restriction, consider what, if any, documentation would be reasonable to require from employees, and apply your policy consistently. Also keep in mind that certain laws limit the type of medical information an employer can request, and any medical documentation or health information received must be kept confidential and separate from the employee's personnel file.
Avoid #4: Prohibiting Lawful Off-Duty Conduct
Several states prohibit employers from taking adverse action against employees and applicants who use tobacco. Additionally, a few states expressly prohibit employers from taking adverse action against individuals on the basis of any legal off-duty conduct.
Best Practice: Even if your state doesn't expressly protect employees from legal off-duty conduct, it is not considered a best practice to have such a policy.
Avoid #5: Safety Bonuses Based on Days without an Injury
Safety incentive programs that offer rewards to employees for consecutive days without a workplace injury may violate the Occupational Safety and Health Act. These programs could discourage workers from reporting workplace injuries out of fear they'd jeopardize the bonus for themselves and/or co-workers.
Best Practice: Consider incentives that promote worker participation in safety-related activities, such as incentives for identifying hazards, making suggestions for safety improvements, participating in safety committees, or assisting in investigations of injuries, incidents, or "near misses."
Avoid #6: Pay Secrecy
Under Section 7 of the National Labor Relations Act (NLRA), employees have, among other things, the right to act together to improve wages and working conditions and to discuss wages, benefits, and other terms and conditions of employment, with or without a union. The National Labor Relations Board (NLRB), which enforces the NLRA, and many courts have found that pay secrecy or pay confidentiality rules violate Section 7 rights. Additionally, some states and local jurisdictions prohibit pay secrecy policies.
Best Practice: Never take action or implement policies that could be construed to restrict employees' rights under the NLRA. Instead, consider taking steps to better communicate information about your company's compensation program and how employees' salaries and wages are determined.
Avoid #7: Overly Broad Social Media Restrictions
The NLRB has taken the position that an employee's use of social media to protest unfair working conditions (such as unequal pay or harassment) may be protected under Section 7 of the NLRA. The NLRB says it will designate policies as unlawful if they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule.
Best Practice: Draft social media policies carefully and provide sufficient details and contexts to make it clear that the rules do not infringe on protected activity. For example, any confidentiality provisions should clearly indicate that employees' wages and other working conditions aren't considered confidential information.
Avoid #8: Probationary/Introductory Periods
Probationary or introductory periods are sometimes used to assess a new hire's performance, but can lead to confusion regarding "at-will" status. At-will generally means that either the employee or the employer may terminate the employment relationship at any time, for any lawful reason. When employers use probationary periods, employees sometimes think that once they successfully complete a probationary period, they are no longer at risk for termination based upon their performance. This misunderstanding can lead to increased risk of wrongful termination claims. Additionally, the term "probationary period" may have a negative connotation. New hires may misinterpret "probationary" to mean that they are immediately placed on a disciplinary action plan at the start of their employment.
Best Practice: Whether it's an "introductory period," "training period," or "orientation period," they all generally run the risk of confusing employees about their employment status. Instead, create a development plan, set clear performance goals, and hold regular check-ins with all new hires to ensure they're meeting performance expectations.
Avoid #9: Discipline Policies that Lack Flexibility
Disciplinary action provisions should give the company flexibility to take action based on the facts and circumstances of each case. If drafted incorrectly, discipline policies may lock you into taking one course of action, such as policies that indicate a verbal warning will be given for all first offenses, a written warning for all second offenses, and so on (commonly known as progressive discipline).
Best Practice: Avoid policies that restrict your ability to decide what type of discipline is appropriate given the severity of the offense and the employee's history of misconduct. State that violations may result in disciplinary action, up to and including termination, and that the company reserves the right to decide what disciplinary action to take in any given situation. Keep in mind, however, that treating employees fairly is key and similar situations and past practices should guide and impact the disciplinary action taken.
Avoid #10: English-Only Policies
The Equal Employment Opportunity Commission has taken the position that rules requiring employees to speak only English in the workplace violate federal law unless they are reasonably necessary to the operation of the business. Policies that require employees to speak only English in the workplace at all times, including during breaks and meal periods, will not likely be considered reasonably necessary.
Best Practice: Employers that believe an English-only rule is reasonably necessary to the operation of their business should consult legal counsel to determine whether it is permitted. If permitted, apply the rule in limited circumstances and only when it is needed to operate safely and efficiently.
When drafting and reviewing your employee handbook, carefully consider what policies to include and what policies to avoid, while taking into account all applicable federal, state, and local laws.