How to prevent being sued because your employee handbook is out of date

Your employee handbook needs to do more than put your company’s benefits, policies, procedures and culture in writing. It also must stand up in court if a lawyer for a disgruntled employee starts to drill down into it.

For instance, did you know that if your employee handbook doesn’t have an at-will disclaimer in it, a terminated employee could sue because he or she can claim they thought their handbook was an employment contract?

All it takes is one small mistake like that, or poorly-worded or conflicting policies, to end up costing your company a lot of time, money and aggravation.

Areas where employee handbooks can get stale

Because it’s become a critical tool for protecting the legal rights and responsibilities of employers, your employee handbook may need a page-by-page review by HR (and then your legal team), especially if it hasn’t been updated since COVID.

Here are some of the most common areas of an employee handbook that can become outdated:

Legal requirements. Does your handbook reflect new federal and state employment laws that have been passed (e.g., the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act)? Does it have an equal employment opportunity statement and an Americans with Disabilities Act accommodations statement? Is there an explanation of employee rights under the Family and Medical Leave Act?

Exempt/nonexempt employee classifications. Wage, hour and overtime complaints are some of the most common legal actions taken by employees and former employees. Your handbook needs to clearly define which employees are exempt from FLSA minimum wage and overtime regs, and which are not.

Technology. If employees use personal devices for work, are there policies describing the appropriate usage of the device for work, along with rules for the use of company data? With company-provided tech, is it clearly stated the company owns all computers, tablets, phones and other tech hardware, along with any data on those devices? It should also be clear that any data on a company-owned device isn’t private.

At-will employment and discipline policies. Review your policies to be sure they don’t imply that employment is guaranteed for a certain period of time. Your handbook should describe at-will employment relationships, where the employer and the employee both have the right to terminate employment at any time, with or without cause. In addition, your disciplinary policies need to spell out what’s a fireable offense.

Timekeeping and overtime policy compliance. Full-time and part-time work schedules need to be described, as well as how breaks are managed. If your policy is that overtime must be approved, you can’t say unapproved overtime won’t be paid. (You’re still legally required to pay it.) You can discipline employees for violating the policy, but you must describe what will happen.

Employees need to be notified when your company makes any significant changes to the handbook. Besides requiring a signed acknowledgment that they’ve read the handbook, consider issuing a new statement when there are significant updates, as well as a disclaimer that handbooks can change at any time.