As your company grows and you add more employees, your exposure to employment related liability increases with each new hire. It also becomes increasingly difficult to assimilate new employees into your company culture as the number of people grow.
An employee handbook is an essential tool to help solve those problems. Your employees will be happier because they will have proactive answers to their common employment related questions. Business owners or HR managers will be happier knowing they are reducing their exposure to liability.
In today’s digital world, there are probably 100+ resources to create your own employee handbook. In our experience representing hundreds of small businesses, we see that people often resort to three paths. We are going to analyze the pros and cons of each of these.
Copying Your Former Employer’s Handbook
If you are in a rush, you might be inclined to copy a handbook from a job you had in the past. This poses several risks. That handbook might be confidential and subject to a confidentiality agreement with your former employer. That handbook might be outdated by many years. Depending on how sophisticated your former employer was, there is no guarantee their handbook was high-quality to begin with. Also, there could be key policies and procedures omitted from that handbook, which you won’t even know you are missing.
Online Non-Lawyer Services
There are dozens of online services that sell (or in some cases they are free) sample policies. This can be a good option for micro-businesses with only one or two employees. It is certainly affordable and would be a good start early in the business growth lifecycle. But there are still some risks. You generally have no way of knowing whether the sample policies are updated in real time as laws change. The policies might be drafted to comply with another state’s laws. Also, you generally don’t have access to a human being to advise you of which policies you need and don’t need, and how best to customize those policies for your particular business. Perhaps the biggest risk is that you have no legal recourse if it turns out a policy was illegal.
Hire an Employment Lawyer
This is the most expensive option but will undoubtedly produce the best quality product. The money invested will be a drop in the bucket compared to the cost of dealing with an employment related lawsuit. An attorney will add value to your handbook.
At Hurley Law, we subscribe to a sophisticated legal research application that gives us access to the best-practice, industry standard employee handbook templates. These templates are updated each time a state’s laws change. This is especially valuable to employers that have employees working in multiple states.
First, we go through a master list with our clients of all the available policies. We work with you to decide which policies apply to your business. Then we draft the policies you need using the latest templates available. Then we send the drafts to you so you can take some time to review them and make a list of questions or revisions you want. Then we meet to go over your questions and make final revisions. Then we work with you to ensure the handbook is implemented properly within your workforce.
By having an attorney draft your handbook, it is also much easier for that attorney to update the handbook in the future as laws change. For example, we can annually compare the policies against the new templates as they are changed.
For most small businesses, this entire process costs about $1,500 – $3,000 in legal fees.
In 2020, the average cost to settle an employment related claim outside of court was $75,000.00. The average jury award was $217,000.00.