Company-wide employment policies are vital for businesses for a number of reasons. First, employment policies set the ground rules so that every person in the company is on the same page about the business or organization’s practices and expectations for its employees. Setting expectations in this manner can even avoid litigation in the first place. Second, ensuring that employment policies are established and known can provide protection for the company. For example, when defending against wrongful termination lawsuits, a company needs to be able to show that an employee knew the expectations and failed to meet them. A company with no established policy regarding employee expectations will have a much harder time demonstrating that an employee was let go for failing to meet expectations. Finally, various labor and employment laws actually require employers to have and implement certain practices, such as those regarding harassment and discrimination, or disability accommodation. Below are two vital areas where businesses need written company policies, as well as a recommended best practice for implementing these and other company policies.
Most states in the U.S. recognize that employment is “at-will”—that is, when the employee no longer wants to be there, he or she can quit without reason and without notice. Similarly, when the employer no longer wants to employ the employee, the employee can be discharged without cause and without notice. At-will employees can be let go for any reason – a good reason, a bad reason, no reason at all – so long as the reason is not illegal or discriminatory. For example, an employer’s reason for letting an employee go cannot be based on that employee’s race, age, gender, or religion. Unfortunately, though, in defending against a wrongful termination claim, which typically alleges that the employee was let go for an illegal reason, asserting that the employee was at-will and could be let go for any reason is not enough to win the case. Legitimate business reasons for the termination need to be proven to show the termination was not discriminatory or otherwise improper. This does not mean, however, that at-will status has no purpose. It does. When employees are not at-will, even if it is found that the termination was lawful, a court or other adjudicator can evaluate whether the discharge reason was “good enough” and, if not, order that the employee be reinstated. If an employee’s at-will status is intact, and the company proves the discharge was not unlawful, the sufficiency of the discharge reason becomes irrelevant. For these reasons, companies need to ensure that no actions are taken which unwittingly destroy their employees’ at-will status. An employment policy specifying that employees are hired at will is vital—as is ensuring that a company’s other policies do not destroy that status inadvertently.
A variety of states and localities mandate that companies provide certain benefits to their employees, which need to be described in the company policies. These benefits can include, but are not limited to, unemployment insurance, workers’ compensation, short-term disability insurance, and paid holidays or sick leave. Sometimes these state or local requirements might even conflict with current company policy. It is important for employers to be familiar with the mandated benefits for their state and locality, as well as any requirements that their employees be informed of those benefits in writing.
Employee Handbooks and Policies
A handbook detailing a company’s policies can be vital to a business for a number of reasons. First, and very basically, it lets employees know what benefits the company is offering at the time the handbook is issued. Second, it can lay out the company’s expectations of employee performance, behavior, and attitude. Third, because the handbook lays out the company’s expectations for its employees, it can be used as a performance management tool. When an employee is not performing, the handbook can be used as a guidepost to demonstrate the expectations that the employee was not fulfilling. Fourth, it can meet the requirements of the various mandated benefits laws, mentioned above, to offer certain benefits and to put those benefits in writing. Finally, it can protect the company. For example, a handbook can advise employees about company monitoring of computer equipment and of the proper procedure to report harassment or discrimination.