Avoiding Costly Handbook Mistakes
Author: Victoria Kelleher, Brightmine Lead Survey Specialist
Date: August 26, 2024
To navigate an organization successfully, new hires must learn about the policies and procedures they are expected to follow. Employee handbooks can be an effective tool to get employees up to speed on this important information. Beyond this, most employers also use employee handbooks as a medium to educate employees about their rights. However, employers that use handbooks for this purpose need to ensure that handbook statements stay in compliance with the law.
Handbooks that contain incorrect statements about an employee's rights open an organization up to the risk of legal consequences. Mistakes can fuel accusations that a company has obscured the rights of its workers, so employers must be vigilant to keep employee handbooks accurate. This often poses a challenge for employers; employment law is always evolving, so handbook statements can rapidly become outdated if not properly maintained.
The Cost of Mistakes
The legal landscape is constantly changing, so it can be difficult for employers to stay on top of every handbook policy. This is especially true for large organizations, which often have to juggle complex laws or maintain compliance across state lines.
According to a recent Brightmine survey, most organizations find it challenging to keep handbooks in compliance with the law. There can be consequences for this, however. Some respondents in the survey (12%) reported that a mistake in an employee handbook caused monetary repercussions, ranging from legal fees to settlements or fines.
These costly errors tend to fall somewhere within the following categories:
With so many possible risks, employers must be vigilant about designing a process to create and maintain the content of employee handbooks.
Handbook Software Saves Time and Effort
Most companies devote a lot of time and energy to make sure employee handbooks stay up to date. A structured maintenance process can dodge legal troubles, so organizations tend to devote resources to this task. Some organizations consult a lawyer for review on a regular basis, while others delegate the task of monitoring employment law to an employee.
Companies can also invest in tools to help streamline the handbook maintenance process. For example, many organizations use handbook-building software like the Automated Handbook Management tool from Brightmine to automatically screen their handbooks for misalignment with the law. This technology can significantly reduce the time and effort required to create and maintain an employee handbook.
Companies that use this technology tend to experience a less time-consuming revision process. More than half of the companies that use handbook software to help with the revision process spend less than a week per year maintaining their handbooks, while the same is true for only 40% of organizations that don't use software.
Chart 1: Distribution of time devoted to handbooks; Software vs Non-Software
Companies that use software to revise handbooks are also less likely to find legal compliance challenging. For example, while 21% of those that do not use handbook software find it very challenging to keep handbooks compliant with state law, only 12% of those that use handbook software find this task very challenging. This suggests that this technology may provide support that diffuses at least some of the pain around this task.
Employers can cut down the time, costs, and potential repercussions associated with handbook maintenance by investing in tools that are built to alleviate the burden. This technology can eliminate the need for a lot of the grunt work involved in handbook maintenance, ultimately improving the efficiency of the process and lowering costs.
About the research
The Brightmine 2024 Employee Handbook survey was conducted from July 9th, 2024, to July 14th, 2024. It received 374 responses from HR representatives at organizations in the United States that have 250 full-time employees or more.