DISCLAIMER: This post is a general overview of organizational and employer documents. It does not contain legal advice. If you require legal advice applied to your unique situation, please make an appointment to discuss it with an attorney of your choosing and in your jurisdiction.
Many small business owners have trouble distinguishing between important employer documents. They conflate employment contracts and independent contractor agreements. I have also seen them combine employee handbooks with operations manuals. Failing to understand the differences between agreements and policies, I regularly help organizations separate these important employer documents so they are easier for both employer and employee to understand.
Employment partnerships are only as good as their agreements. To achieve the mutually beneficial goals employers and employees choose to pursue at the time offers are made and accepted, there must be clear and comprehensive guidelines. These typically come in a set of employer documents governing the relationship, including:
- Employment agreements
- Mandatory employee policies
- Employee handbooks
- Operations manuals
Employment Agreements
An employment agreement is a legal document that outlines the specific terms and conditions of an individual employee’s employment. It is generally used to protect businesses from losses due to a key employee’s departure. This employer document typically includes:
- Job title and responsibilities
- Compensation, including the employee’s salary, wages, bonuses, and benefits
- Whether the employment is for a fixed term or at-will
- Confidentiality, non-competition, and non-solicitations clauses
- Dispute resolution procedures
Often, employers want to include provisions that are not legally enforceable. For example, one client wanted to include an attendance policy in the employment agreement. I recommended against this, since the courts cannot enforce an employer’s attendance rules. Such policies are better placed in the Employee Handbook. But first, let’s review the mandatory posters all employers must display on their premises and, in New York, make available to employees electronically.
Mandatory Employer Postings
The federal and state Departments of Labor are among the government agencies that require employers to post notices to educate employees on their legal rights and responsibilities while they are working. The workers compensation board or agency probably has requirements as well. Plus, there might be additional information required by your city or local government.
The mandatory postings typically address:
- Minimum wage and overtime
- Equal opportunity and non-discrimination
- Harassment, discrimination, and retaliation prevention
- Safety and health, including workers compensation and disability information
- Paid Safe and Sick leave, Family Medical Leave, and other time off benefits
Employee Handbooks
An employee handbook is a comprehensive employer document that provides information about internal policies, procedures, and benefits. It serves as a reference guide for employees and should include:
- Employer history, vision, mission, and values. This helps employees determine whether employment with this organization will align with their career visions, life missions, and personal values. The more the interests of employer and employee align, the greater likelihood there will be a sustainable employment partnership.
- Employee rights and responsibilities. Clear expectations based on relevant laws and business needs guide employees and their managers when conflicts arise.
- Benefits information. Sharing details about health insurance, retirement plans, and paid time off (PTO) can avoid unnecessary delays and confusion.
- Performance management. There are different schools of thought about the best way to address employee performance when it is not at the level an employer needs. We prefer to focus on the behavior, rather than conflating it with immutable traits, and ensure the employee has all training and tools required for success before taking disciplinary action. Regardless of the approach taken, the employee handbook should explain the process.
Operations Manuals
An operations manual is a detailed guide that gives step-by-step instructions for completing specific tasks. Topics covered in this employer document might include:
- Client service. From describing common scenarios to providing sample scripts to guide conversations, this section can ensure clients know what to expect, regardless of who is serving them.
- Equipment and maintenance. Nearly all jobs today require use of computers, specialized software, and other employer property that must be maintained in compliance with manufacturer and insurer recommendations. Wise employers ensure employees are aware of this and take appropriate action to minimize breakage and losses.
- Emergency procedures. Unfortunately, accidents will occur and they will probably do so infrequently. A clear process for responding can limit injuries to people and other business assets.
In Short
While employment agreements, policies, handbooks, and manuals may seem similar, they serve distinct purposes within a small business. By understanding the differences, an employer can set itself apart, attracting and retaining top talent.