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The next tip for those who own, or want to own, a small business: set written employment policies.

All companies, large and small, need a written employment handbook that describes the policies that must be followed.  When I talk to an employer or an employee about a legal issue, one of the first questions I ask is: is there an established policy that governs this issue?  This is the same question that the court is going to ask if a legal dispute turns into a lawsuit.  The answer should be found in the written handbook.

Also, employers tend to rely on their “policy” when a problem arises.  For instance, when an employee asks a small business owner for something the owner is not willing to give, the typical (and easy) response to the employee is: that’s not our policy.  The problem is that many times the “policy” is not in writing.  Another problem is that there tends to be more inconsistency in how employees are treated when a policy is not in writing.  Inconsistency leads to the appearance of discrimination which can lead to a lawsuit.

Many policies can be included in a company’s handbook.  Typical handbooks include descriptions of the policies governing: attendance, vacation, sick, pay, confidentiality, trade secrets, discrimination/harassment, discipline, etc.  One of the most important parts of the handbook is the at-will employment disclaimer which informs employees that the handbook does not create a contract of employment.  Another very important part of the handbook is the “acknowledgement of receipt” of the handbook.  Employees should be required to sign the acknowledgment and return the acknowledgment to the company.  The employer will be hard pressed to prove to a judge later that the employee was aware of the company’s policies if the employer never had the employee sign an acknowledgment of receipt of the handbook.

And, last, but not certainly not least, once the employment handbook is created, all supervisors must be trained on how to implement the company’s policies.  There is no protection for the company if supervisors do not know and consistently enforce the policy.


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