Your Employee Handbook is a Legal document - Treat it like one

​By Attorney Edward Jesson

When business owners think of employee handbooks, oftentimes they think of it as just one more administrative task that needs to be checked off the list when onboarding a new client. Because there are so many online HR services that will offer an employee handbook as part of their services, it can be tempting to just take whatever they have on offer and call it a day.

However, in North Carolina, and many other jurisdictions, the employee handbook is not just a HR document, it’s a legal document which can create legally binding promises between your business and your employee. Often, what you’ll obtain from your online HR service is a generic template, designed to work for thousands of clients over multiple jurisdictions and over many different industries. However, generic, nonspecific language is a risk when it comes to your employee handbook.

Employment law is highly state specific; what is required in, for example, California, can be vastly different from what is required in North Carolina. For example, North Carolina’s Wage and Hour Act has very specific rules on what can be withheld from an employee’s final paycheck and under what circumstances a business can withhold those funds. Violating the Wage and Hour Act can result in, among other things, an award of treble damages for the aggrieved employee as well as the business having to pay that former employee’s attorney’s fees—that can turn a small mistake into a big financial headache.

One example of an employee handbook that we recently came across discussed final paycheck withholdings and simply (and generically) stated that “state law applies.” In North Carolina, that is insufficient, the employee handbook has to state, specifically, what withholdings may be withheld from that final check. Accordingly, the employer wasn’t able to withhold anything from the paycheck, despite having invested a lot of money in training that the employer wished to recoup.

Your employee handbook is one of the most important legal documents your company has. It governs how you treat your employees, how you handle disputes, and how you hold up in court. Delegating it to an HR platform because it's convenient is like using an online will generator because it's fast — it might technically do the job, until it doesn't. And when it doesn’t, there are going to be real issues that arise as a result.

If you need an employee handbook reviewed, or need a handbook drafted from scratch, the attorneys at Jesson & Rains, PLLC are ready and able to assist in ensuring it’s compliant with your state’s legal requirements.