By:  S. Eric Bass, J.D., M.B.A.

Okay, maybe it’s not exactly thrilling, but take a minute to think about your answers to these questions:

  • Does your business have to pay out accrued vacation and sick leave upon termination of an employee’s employment?
  • Is your business permitted to deduct from an employee’s paycheck the costs incurred by the business from that employee’s improper actions or theft?
  • Can you, the business owner, access information on your employee’s business computer or e-mail account?
  • If you discover serious employee misconduct, can you terminate an employee’s employment immediately, or do you have to follow a dispute resolution process?
  • What should your employees do if they believe they’ve been harassed or discriminated against?

If you do not have a good, written employee handbook, the answers to these questions may be in doubt and can cost your business valuable time, money, and effort.  While an employee handbook isn’t necessarily as stimulating to create or read as a bestselling novel, it is certainly worth the cost and effort to produce.

Do I Need A Handbook?

Hiring, managing, and working with employees, even in small numbers, are major undertakings for business owners whether they truly acknowledge them as such or not.  Employees are the face of the business to the public, are responsible for the most important assets of the business and have the ability to cause the biggest problems for a business through their actions (or inactions).  Thus, your employees are often simultaneously one of the greatest assets and one of the greatest liabilities for your business.

Given the importance of employees in the life of any business, there are a multitude of laws and regulations that help guide and control the employer-employee relationship.  These laws often leave many options up to the employer to define the terms and conditions of the employment relationship.  However, if the employer chooses not to take advantage of his or her ability to define the relationship properly, these laws will do it for the employer.  In those instances, they will usually do so to the advantage of the employee.  Isn’t it worth some real effort to make sure your business uses the opportunities provided in the most practicable and effective way possible?

How Do Handbooks Work In North Carolina?

Let’s just look at the possible answers to the questions above under North Carolina and Federal laws for some examples of how a properly written employee handbook can save the business money.

  • With regard to the payment of accrued vacation or sick time to departing employees, if your business does not have a written and published policy putting limits on accruals of paid leave or stating that payments of such leave are limited upon termination of employment, your business will generally have to pay unlimited accrued time to all employees or pay departing employees their accrued time.
  • Without properly drafted written policies and very specific written consents from the employee, your business usually cannot deduct expenses resulting from their misconduct or even theft from employees’ paychecks unless you institute a legal proceeding against them.
  • You may also violate an employee’s protected expectation of privacy on their business computer by accessing information on it unless you have a properly written policy stating that the computer is business property and that they should not have any such expectation.
  • An improperly drafted employee policy or handbook can remove your employees from “at-will” employment status, meaning that you cannot terminate their employment for misconduct without completing a discipline procedure or enduring a certain period of continued employment.
  • Businesses without well-defined anti-harassment and anti-discrimination policies can lose opportunities to efficiently address problems that arise before they become subject to an investigation or expensive lawsuit.

How Can I Get a Handbook?

Employee handbooks can help save money, time, and effort in more ways than I could possibly list in a short article. But many business owners fail to use this cost saving tool to the fullest extent possible.  Even if your business has only a few employees, it is worth your time to develop good written employment policies and/or an employee handbook.  These written policies and handbooks need not be large encyclopedias, but they should be drafted to suit your business.  You should generally seek the counsel of an attorney or human resources expert located in the state or states where your business has employees to help prepare your policies. For more information about Venn Law Group’s employment law practice, click here.

Lastly, do not go through the time and effort to prepare these policies and just stick them in a drawer.  Employee policies and handbooks need to be published properly and given to employees.  They also need to be updated on a fairly regular basis in order to keep up with changes in technology, the size and nature of your business, and applicable laws.  While you did not necessarily go into business to prepare and update employee handbooks, with the proper assistance and guidance you can put these protections in place without too much strain while still reaping the benefits of proper handbook preparation and implementation. And saving time and money always provides a thrill!