As 2023 approaches, now is the time for employers to consider updating their employee handbooks. Handbooks, handed out at orientation and often ignored afterwards, are an important compliance tool for employers dealing with all kinds of employment issues. And the policies in the handbook can be a useful tool when defending various employment claims, such as wage and hour violations, harassment and discrimination lawsuits, and leave disputes.
However, an outdated manual can be a liability, especially for multi-state employers with a widely dispersed workforce. These employers in particular need to be mindful of the myriad of different employment laws and need to be aware of new developments in every state where an employee is located. These complicated compliance requirements can seem cumbersome or burdensome, especially in an environment where employers are already struggling to recruit and hire, but not doing so can be costly.
Below we highlight some particularly key and nuanced issues to consider when deciding whether to update some of the most referenced sections in any manual – the paid leave policy, the expense reimbursement policy, and the policies to combat harassment and discrimination.
The past year has seen growing calls for paid vacation laws to be enacted at the state and local levels. And new paid vacation laws took effect in several states in 2022, such as New Mexico’s Healthy Workplaces Act. Indeed, at least 11 states and municipalities have enacted paid vacation laws and more are likely to follow. Consider these factors when evaluating whether your paid time off policies may need updating:
- Pay attention to employee location and headcount. Depending on the laws of those jurisdictions, consider a state or local supplement to the main manual to account for the nuances of the vastly different paid vacation laws, which may apply depending on how many employees you have in a particular state. .
- Clearly explain employee eligibility. Federal law requires employers to grant FMLA leave after one year of work and 1,250 hours worked and state and local requirements may require leave after less time on the job (for example, Wisconsin’s unpaid FMLA law only requires than 1000 hours in the previous 52 weeks). However, employers can also offer time off at any time before these requirements come into effect. Make sure your policy clearly explains when an employee may be eligible for various paid leaves, and make sure that if such leave is protected by law, the policy is compliant.
- Make sure your leave policies aren’t inadvertently discriminatory. For example, parental leave policies should apply equally to all types of new parents, although there is an important distinction to be made between paid leave to recover from childbirth and paid leave to create links or for other non-medical reasons.
Reimbursement of expenses
While federal law only requires employers to reimburse employees for expenses that bring an employee’s earnings below the federal minimum wage, state and local laws vary widely in the treatment of expenses and reimbursement of workers. California, Illinois, Iowa, Massachusetts, Montana, New York, and the District of Columbia require employers to reimburse employees for various work-related expenses. Additionally, several of these states consider expense reimbursement salaries to be subject to the same scheduling requirements as regular payroll.
Lawsuits for not properly reimbursing employee expenses are increasing rapidly in these states and for all kinds of expenses ranging from typical expenses work-related expenses such as telephone and internet charges and the cost of office supplies, to the additional cost of energy to heat or cool a home. Reimbursement of expenses also raises questions regarding the ultimate ownership of devices and equipment, particularly when employment ends. To address these issues, a good expense reimbursement policy clearly provides:
- what expenses are reimbursable and when will the employer reimburse the employee (applicable state law will govern these and set reimbursement floors);
- who owns the devices or equipment; and
- how is the material treated at the end of the employment relationship (will it be erased from the company’s information and will the employee be able to keep it, must it be returned, etc.?).
In recent years, state and local authorities have expanded the definitions of protected features. At least 18 states and many municipalities have added protections for natural and protective hairstyles, for example. Additionally, the medical or recreational use of marijuana is now legal in 26 states. Several of these states, such as Connecticut, Montana, Nevada, New Jersey, New York, and Rhode Island, provide protections for employees who engage in the recreational use of cannabis products outside of working hours. labor and therefore limit an employer’s ability to refuse to hire or to take adverse action. against these workers.
While catch-all language to include additional protected features, such as “and any other feature protected by federal, state, or local law”, is a common solution, adding the particular protected feature to the policy – and better yet harassment and discrimination training – can serve as a defense against liability.
At a minimum, each manual should contain an anti-harassment and anti-discrimination policy that:
- provides national and local characteristics that are protected from unlawful harassment and discrimination;
- has a reporting procedure offering multiple reporting channels for individuals to file complaints of harassment; and
- underscores the commitment of employers to maintaining a workplace free of such illegal conduct.
Finally, remember the basics:
- Use simple language.
- Set clear expectations for attendance, conduct and discipline.
- State that the manual is not a contract of employment and does not alter the voluntary nature of the employment.
- Include that the policies contained in the manual may be revised, modified or revoked at any time, with or without notice.
- Make sure the company retains discretion and flexibility when making decisions.
- Make sure you actually follow the policies!
If the policies are outdated or no longer followed, that’s a clue that your manual needs a thorough update.