Why Every Employer Should Have An Employee Handbook – And The Policies That Should Be In There

Whether an employer has one employee or 1,000, having a legally compliant employee handbook is essential.  Particularly in a state like California, where employment-related lawsuits are filed against employers virtually every day, employee handbooks often serve as an employer’s first line of defense against many such claims by demonstrating an employer’s understanding of (and compliance with) the laws they are required to follow. Employee handbooks also communicate the policies that staff are expected to follow, and therefore they can serve as an objective standard justifying the imposition of disciplinary action, including termination, against employees who fail to comply with company policies. The following topics should be covered in every California employer’s handbook.

Policy of At-Will Employment

The default rule under California law is that employees are employed “at will,” meaning that both the employee and the employer have the right to terminate the employment relationship at any time for any reason with or without notice.  Some employers choose to deviate from this default rule by entering into employment agreements (verbal or written) promising an employee that he or she will be employed for a specific period of time (for example, a one-year or three-year employment commitment).  Employers who want to retain the flexibility to terminate employees “at will” should include language in their handbook expressly setting out that employees are employed at-will, with no guarantee of continued employment, absent a written agreement to the contrary signed by an authorized officer of the company.

Equal Employment Opportunity, Anti-Discrimination, Anti-Harassment, and Anti-Retaliation Policies

As we previously blogged about here, as of April 2016, California employers became legally obligated to set out their anti-harassment, anti-discrimination, and anti-retaliation policies and procedures in writing.  Because discrimination, harassment, and retaliation claims are among the most frequently litigated employment claims in California, it is particularly important for these topics to be addressed in detail in the handbook.

Meal and Rest Break Rights

California law entitles non-exempt employees to unpaid, duty-free, 30-minute meal periods and also to paid, duty-free, 10-minute rest periods.  Employees who do not receive meal and rest breaks in a manner that complies with the law can be entitled to significant damages and penalties. For example, in December, a jury reached a $2 million verdict against Apple for violating meal period laws with respect to its retail employees.  Having a compliant meal and rest break policy is the first step to preventing (and, if necessary, defending against) such claims.

Overtime Obligations

Non-exempt employees are entitled to overtime pay when they work more than eight hours in a day, more than 40 hours in a workweek, or on the seventh consecutive day in a workweek.  Employee handbooks should define the employer’s “workweek” for overtime purposes.  Moreover, employers seeking to limit overtime costs should advise employees in the handbook that managerial approval must be obtained prior to working overtime.

Sick Leave

As we discussed here, California law entitles most employees in the state to at least 24 hours of paid sick leave each year.  Moreover, as we discussed here and here, several cities in California, including Los Angeles and Santa Monica, have enacted more generous paid sick leave laws.  Employers should be sure to include in their handbooks sick leave policies designed to comply with these laws.

Vacation/Paid Time Off

Paid vacation time or other forms of paid personal time off are not legally required in California, but many employers choose to offer paid time off to their staff as an employment perk.  Employers who do so should be sure to set out their paid time off policies in their handbooks, including providing information as to (1) who is eligible for paid time off, (2) when employees are eligible for paid time off, (3) how paid time off is accrued, (4) whether employees with greater seniority will be eligible for more paid time off than employees with less seniority, (5) any caps or limits on vacation accrual and/or use, and (6) how much advance notice is required of employees seeking to take paid time off.

Leaves of Absence

California and federal laws afford employees the right to take a variety of leaves of absence, including for medical reasons, to serve on a jury, and to vote, among other things.  Some of these legally protected leaves are described here.  The employee handbook should contain a discussion of the leaves of absence for which employees are eligible and define the procedures employees should follow when they seek to take such leaves of absence.

Rules of Conduct

Each employee handbook should contain a Rules of Conduct to put employees on notice of the kinds of behavior that can result in disciplinary action, such as falsifying time records, drinking or doing drugs on the job, repeated tardiness or unexcused absences, removing or borrowing company equipment, insubordination, and unsatisfactory work quality or quantity.  An employee’s failure to comply with the Rules of Conduct can then serve as a legitimate reason to discipline or terminate that employee.

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The above summary has been prepared for general informational purposes only and is not intended as legal advice.  If you have any questions regarding your employee handbook, or if you are looking to have an employee handbook prepared for your business or organization, please contact Bernstein & Friedland, P.C. attorney Diana Friedland at (818) 817-7570.

Bernstein & Friedland, P.C. is a boutique employment law firm in Los Angeles specializing in wrongful termination, discrimination, harassment, retaliation, and unpaid wage and overtime matters.  Please visit our website at www.laemploymentcounsel.com to learn more about us.

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