Leadership

Top 10 Employee Handbook Mistakes

 
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Although most employers at least have an employment handbook, few companies treat it as a priority item. That’s a shame because a handbook presents a wonderful opportunity to communicate with your workforce about your organization’s philosophy, mission, and culture. Companies like Netflix and Nordstrom have demonstrated that handbooks can be effective without being dry and tedious legal documents. But make no mistake, your handbook does have legal ramifications.

A good handbook informs your employees about workplace rules and policies and sets expectations for performance and conduct, which prevents misunderstandings that may lead to disputes. Thoughtful and properly worded policies also may help you with your legal defense if a dispute does arise. On the other hand, a problematic or deficient handbook can hurt your cause more than it helps you. Here are the 10 biggest problems I see with employment handbooks.

WHAT NOT TO DO:

Failing to keep it up to date. I recently reviewed a handbook that contained a policy requiring smokeless ashtrays for employees who want to smoke in the office. I’m not sure in which decade somebody last reviewed the handbook, but I’m guessing hairstyles were a lot bigger then. Laws change. Policies and practices change. The very nature of your workforce and mission may change. Your handbook should reflect your current policies and be compliant with current law. Ideally, you should take a look at your handbook every couple of years.

Believing that one size fits all. I’ve seen a lot of handbooks that look like they’re basically a form downloaded from the Internet or borrowed from another source, such as someone’s former employer. I’m not necessarily knocking forms. You have to start somewhere, and handbooks do have a lot of common elements, so you don’t need to create each one as a unique work of art. But a handbook form that you borrow from somewhere else is almost never going to be exactly right for your situation.

How many employees you have, whether you’re a government contractor, whether you’re a public or private-sector employer, and whether you have a unionized workforce are all things to consider when you’re determining what to include in your handbook. Your particular industry may have workplace issues that don’t arise in other industries. For instance, manufacturers may want to address certain safety issues that wouldn’t be relevant for other employers. Banks may want to include cash-handling protocols. Hospitals may want to address vaccination requirements for employees. Professional groups may want to address licensure requirements.

In addition, your discretionary benefits and attendance policies should be tailored to reflect the practices that make sense for your workplace. You may have an insurance policy that requires certain information to be in your handbook. The list goes on and on. So, sure, start with a form if you like, but don’t think that it will get you all the way to where you need to be.

Failing to include required policies. A lot of what’s in a handbook is discretionary or, at most, recommended. But some policies are required. For instance, if you are covered by the Family and Medical Leave Act (FMLA) and you have a handbook, you have to include an FMLA policy in your handbook.

Being internally inconsistent. A lot of handbooks I’ve seen have a “Frankenstein” quality, meaning they seem to be sort of patched together from various revisions and addendums over the years. It’s great to update your handbook periodically. But when you do, read through the entire thing to make sure the updates are consistent with and don’t contradict, other policies that are already in the handbook. For instance, I’ve seen handbooks with an FMLA policy, an attendance policy, and a paid leave policy that all say different things about how employees should provide notice of absences.

Disregarding state law. Most “form” handbooks you get from the Internet focus on federal law requirements, which is great because compliance with federal law is important. But don’t forget about state and local laws, which may affect the wording of policies on topics ranging from weapons in the workplace, to drug testing, to jury duty, to parental leave—and much more. And if you have employees in more than one state, you may need to have separate versions of your handbook or at least state-specific addendums.

Trying to make a handbook a contract. A handbook is for guidance only. You don’t want your handbook to be a binding agreement, on your company or your employees. Your handbook should expressly state that it isn’t a contract and you may unilaterally revise it at any time. Unfortunately, I’ve seen situations in which employers correctly include such a disclaimer in their handbook but also include things that purport to be binding on employees, such as confidentiality, noncompete, or arbitration agreements. If you want to have a binding agreement with an employee—in other words, a document you can enforce posttermination, outside the employment relationship, through a court or an arbitrator—you should create a separate document that will be executed by the employee apart from the handbook.

Policies not matching practices. I’ve seen some good-looking handbook policies on topics ranging from moonlighting, to accrual of paid leave benefits, to progressive discipline. On paper, the policies are legally compliant and sound awesome. But the problem is, once I begin talking with the employer as we go over the handbook, I realize the company isn’t actually doing what the handbook states it will do. That’s a recipe for disaster.

The main purpose of your handbook is to inform your employees about your policies and procedures and set their expectations. If your practices don’t match your policies, neither purpose is satisfied, your credibility is undermined, and you open yourself up to employment claims.

The reasons an employer’s policies don’t match its practices may vary. Maybe you used to do things that way, but you’ve changed your methods or rules. That’s fine—but you need to change your policies to reflect what you’re actually doing. Or maybe you need to be doing things the way the handbook states you’ll do them for purposes of legal compliance, but some of your supervisors haven’t gotten the message. More on that in a minute.

Failing to get an outside perspective. In addition to periodically conducting an internal review, you should consider getting an outside expert to take a look at your handbook. Experts may provide guidance on legal compliance as well as trending topics that you haven’t previously addressed in your handbook. An outsider may also spot ambiguities or inconsistencies that you’ve failed to see because you’re too close to the verbiage you’ve been working with for years.

Failing to distribute the handbook. A handbook is worthless as a resource for employees unless they have access to it. And a handbook is worthless to mitigate your risks unless you can prove your employees have access to it. Be sure to distribute a revised or new edition of your handbook to all employees, not just to new employees during orientation. And make sure you require employees to acknowledge, in writing or electronically, that they have received or have access to the current version of your handbook.

Failing to train supervisors. Your supervisors should have a good working knowledge of the contents of your handbook. For one thing, your handbook probably repeatedly tells employees to go to their supervisors with questions about policies. That suggestion won’t work out so well if your supervisors have no clue what your policies say. Your handbook can also be a great tool to ensure consistent decision making and treatment of employees by supervisors, which reduces your risk for employment claims. You really need to conduct comprehensive supervisory training at least every couple of years, and reviewing your handbook should always be part of that training.

Bottom Line

I hope this list will inspire some thoughts about handbook review. And of course, if you have questions about your handbook, it’s always best to consult us.


How to Avoid Misclassifying Unpaid Interns This Summer — and All Year Long

 
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The U.S. Department of Labor’s (DOL) revised test for determining whether interns are employees under the Fair Labor Standards Act (FLSA) just turned one, and the summer hiring season is fast approaching. Misclassification can be costly for employers. Let’s make sure you understand and are correctly applying the DOL’s revised test for unpaid internships.

DOL Identifies 7 Factors for Determining ‘Primary Beneficiary’

A year ago, the DOL announced a new primary beneficiary test for determining whether interns are employees under the FLSA. The Act requires for-profit employers to pay employees for their work. Under the Act, “employ” means to “suffer or permit to work.” Based on that vague definition, interns and students may qualify as employees to whom compensation must be paid.

Under the primary beneficiary test, the DOL uses seven factors to determine whether the employer or the intern is the primary beneficiary of the relationship. The test is intended to be flexible and dependent on the unique circumstances of each case, and no single factor is determinative. In its statement announcing the adoption of the primary beneficiary test, the DOL noted the change would “eliminate unnecessary confusion among the regulated community” and give the Wage and Hour Division (WHD) “increased flexibility to holistically analyze internships on a case-by-case basis.”

The Primary Beneficiary Test Includes an Examination Of:

  • The extent to which the intern and the employer clearly understand there is no expectation of compensation (any promise of compensation, express or implied, suggests the intern is an employee—and vice versa);

  • The extent to which the internship provides training that would be similar to training provided in an educational environment, including the clinical and other hands-on training offered by educational institutions;

  • The extent to which the internship is tied to the intern’s formal educational program by integrated coursework or the receipt of academic credit;

  • The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar;

  • The extent to which the internship’s duration is limited to the period in which it provides the intern with beneficial learning;

  • The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern; and

  • The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at its conclusion.

If the intern is found to be the primary beneficiary of the parties’ relationship, he wouldn’t be considered an employee under the FLSA, and he would therefore be exempt from the Act’s payment requirements for employees.

What This Means for You

The DOL has increasingly scrutinized internships and cracked down on the misclassification of workers and interns. As a result, you should take steps to ensure your interns meet the primary beneficiary test. Evaluate each internship on a case-by-case basis, and carefully consider the structure of your internship program and the program run by the schools with which you affiliate, as well as any compensation you offer and your method of payment. Merely labeling a summer position an “internship” doesn’t mean you won’t have to pay the intern—compensability depends on whether the intern receives the primary benefit of your arrangement with him.

Additionally, you must take care that all written communications and materials related to your internship program are carefully worded to avoid any inference of an employment relationship. Double-check the wording on your webpages and downloadable information and any mailers, marketing materials, internship agreements, and other relevant documentation that you provide to interns and their schools.

 

How to Stimulate Ethical Behavior in the Workplace

 
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Unethical behavior in the workplace costs businesses a lot of money, integrity, and marketable clout.

According to research, unethical business practices were on the rise a few years ago and might have gotten worse, but 56% of Americans will stop buying goods and services from brands they think are unethical, and many will actively support brands they view as ethical. Additionally, 48% of consumers consider employee treatment when determining whether a company is ethical.

So, if you want to stimulate ethical behavior in your workplace, you should consider doing the following.

Develop and Document Standards and Policies

Put clear, ethical standards and policies employees and leaders should abide by in writing, and have the employees and leaders sign the guideline documents to ensure they read and understand the information. Also, include how violations of the guidelines will be handled, including repercussions, and how employees can report them.

Foster and Enforce Standards and Policies

Continue to enforce your ethical standards and policies once they are documented and implemented to ensure they are followed and taken seriously, and be clear and specific about how these policies will be enforced and what may happen if an employee violates one of the standards, such as being handed a written warning or getting suspended.

Start at the Top

Begin with your leaders and executives to stimulate ethical behavior across the workplace, and make sure they are on board with developing, implementing, and enforcing your ethical standards and policies. These same leaders should also be held accountable for their ethical behavior, just as their subordinates are. Leaders and managers need to lead by example in following ethical practices if the policies are to be fully effective.

Provide Ethics Training

Because some common business practices are technically unethical, all employees should receive ethics training so they know how to confidently identify and avoid unethical behavior, as well as are empowered with knowledge on how to handle inappropriate interactions.

Support and Protect Employees

Make sure that you provide an anonymous means of reporting unethical behaviors and that those who do report such actions will be protected from retaliation that would prevent them from speaking up.

Consider taking the steps above to stimulate a more ethical and profitable workplace.


Three Golden Rules for Millennials in the Workplace

 
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Leadership

I have never seen leaders struggle more than they do with Millennials. The Millennial generation, with its oldest members now well into their thirties, is still seen as entitled, fickle, and hard to retain. That perception is wrong, and I encourage leaders and senior staff to adopt a different view.

To start, here are three rules to live by:

Manage People, Not Positions

Baby Boomers grew up learning that “children should be seen and not heard.” To compensate for their own silence, they urged their Millennial offspring to speak up. From their first words, Millennials have learned that their voice matters. If they see a problem, they roll up their sleeves and solve it. They want a job that comes with purpose, not just a paycheck.

One study found that 76% of Millennials consider a company’s social and environmental commitments when deciding where to work, and 88% say their job is more fulfilling when there are opportunities to make a difference. Millennials want to raise their voice (and they want to use it for good)!

Many organizations say they like when Millennials speak up, but I’ve rarely found an organization built to the strengths of this generation. I’m here to tell you that any organization that embraces this approach will see its staff rise and grow to meet the challenge.

Innovation to Retain Top Talent

A company’s tax status is no excuse for poor innovation. Failure to innovate makes it hard to recruit and retain employees.

Millennials have a strong tendency to job hop, averaging nearly 3 jobs in their first 5 years after graduation. By comparison, Millennials’ predecessors, Generation X, averaged 2 jobs in their first 10 years after college.

Where innovation thrives, so do Millennials. These employees are “entrepreneurial,” which means they are attracted to fast-paced, changing cultures that take risks. But they are also immersed in lifestyle culture and aim to build their own personal brands.

Millennials want more than just “tech frills,” like catered snacks and an in-house barista. They prioritize authenticity, flexibility, and opportunities to travel.

I learned that it offers employees the opportunity to travel to Kenya, India, or Ecuador on group staff trips to see firsthand the organization’s work in communities around the world. Not every employer can offer this, but connecting Millennials to your work’s global impact can be essential.

And, it’s important to recognize how connecting your employees to their work in a meaningful way can help lend itself to the success of your business.

Millennials Are Leaders, Too

Success begins with leadership. Millennial CEOs encourage their employees to go beyond earning a living and live their personal purpose through their work. We all need workplaces to embrace Millennials for who they are and for what they bring to the organization.

Too many leaders are throwing in the towel and doing as little as possible when it comes to managing Millennials. Leaders need to fundamentally alter this mind-set and see Millennials as an asset.

Why is this so important? Believe it or not, there is a generation after the Millennials: Gen Z. These are the interns at your office right now. Typically, the ones on the front lines of managing a new generation are members of the generation right above them.

Top 4 Characteristics of 21st Century Leadership

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Faster communication, shifts in demographics, globalization and numerous other changes in today’s business world means that leadership styles must also be altered to keep up with the current environment.

Although certain characteristics of leadership such as vision, intelligence, good judgment, ambition and integrity are still valuable, the “hierarchical, inward-focused” method of leadership will not fit well with the 21st century business needs.

Below are the four key characteristics that distinguish the leaders who are successful in today’s ever-changing business environment:

1. Capacity to Navigate – This skill of scanning the fast-changing business landscape allows leaders to see signals and patterns that might impact the company’s growth.

2. Capacity to Empathize – This allows leaders to reach and connect with people who are different from them.

3. Capacity to Self-Correct – Companies need leaders who are able to evaluate their own long-standing ideas and assumptions about leadership and adjust them if necessary for the benefit and success of the organization.

4. Capacity to Set Up Win-Win Propositions for Stakeholders – With the current rapid flow of information, leaders must embrace transparency and competition. Effective leaders strive to create appealing propositions for all of the various stakeholders.

These four key characteristics are a guide for successful leadership in today’s fast changing business world.

 

     – HR Daily Advisor