With 2023 around the corner, now is the time for employers to consider updating their employee handbooks. Handbooks, handed out at orientation and often thereafter ignored, are an important compliance tool for employers addressing all manner of employment issues. And handbook policies can be a helpful tool when defending a variety of employment claims, such as wage and hour violations, harassment and discrimination lawsuits, and leave disputes.

An outdated handbook however, can be a liability, particularly for multistate employers with a widely-dispersed work force. These employers in particular must be attuned to the myriad of different employment laws and must be aware of new developments in any states where any employee is located. These complicated compliance requirements may seem tedious or burdensome, especially in an environment where employers are already struggling with recruiting and hiring, but failure to do so can be costly.

Below, we highlight a few particularly key and nuanced issues to assess when deciding whether to update some of the most-referenced sections in any handbook – the paid leave policy, the expense reimbursement policy, and the anti-harassment and discrimination policies.

Paid Leave

The past year saw increasing calls for paid leave laws to be enacted at both the state and local level.  And new paid leave laws have come into effect in several states in 2022, like New Mexico’s Healthy Workplaces Act. Indeed, at least 11 states and municipalities have enacted paid leave laws and others are likely to follow. Consider these factors when assessing whether your leave paid policies may be in need of an update:

1. Pay attention to where employees are located and headcount. Depending on the laws in those jurisdictions, consider a state or local supplement to the main handbook to account for the nuances under greatly differing paid leave laws, which may apply depending on how many employees you have in a particular state.

2. Clearly explain employee eligibility. Federal law requires employers provide FMLA leave after one year on the job and 1250 hours worked and state and local requirements may require leave after less time on the job (e.g., Wisconsin’s unpaid FMLA law only requires 1000 hours in the preceding 52 weeks). However, employers can also offer leave at any point before those requirements kick in. Ensure that your policy clearly explains when an employee may be eligible for various paid leaves and ensure that if such leave is protected by law, the policy is compliant.

3. Make sure your leave policies are not inadvertently discriminatory. For example, parental leave policies should apply equally to all types of new parents, although there is an important distinction to be made between paid leave for recovering from childbirth and paid leave for bonding or other non-medical reasons. 

Expense Reimbursement

While federal law only requires that employers reimburse employees for expenses that bring an employee’s earnings below the federal minimum wage, state and local laws vary greatly in the treatment of worker expenses and reimbursement. California, Illinois, Iowa, Massachusetts, Montana, New York and the District of Columbia require that employers reimburse employees for various work-related expenses. And further, several of those states consider expense reimbursement wages subject to the same timing requirements as regular payroll.

Lawsuits for failure to properly reimburse employees for expenses are rapidly increasing in these states and for all manner of expenses ranging from typicalwork-related expenses such as telephone and internet fees and the cost of office supplies, to the extra cost of energy to heat or cool a house. Expense reimbursement also raises questions regarding the ultimate ownership of devices and equipment, especially when employment ends. To address these issues, a good expense reimbursement policy clearly provides:

1. what expenses are reimbursable and by when the employer will reimburse the employee (applicable state law will govern these and set floors for reimbursement);

2. who owns the devices or equipment; and

3. how the equipment is handled when the employment relationship terminates (will they be wiped of company information and the employee can keep them, must they be returned, etc.?).

Protected Characteristics

Over the last several years, state and local authorities have expanded definitions of protected characteristics. At least 18 states and many municipalities have added protections for natural and protective hair styles, for example. Moreover, medical or recreational use of marijuana is now legal in 26 states. Several of those states such as Connecticut, Montana, Nevada, New Jersey, New York, and Rhode Island provide protections for employees that participate in off-duty recreational use of cannabis products and therefore limit an employer’s ability to refuse to hire or take adverse action against those workers.

While catch-all language to include additional protected characteristics, such as “and any other characteristic protected by federal, state, or local law,” is a common solution, adding the particular protected characteristic to the policy – and better still to harassment and discrimination training – can serve as a defense against liability.

At a minimum, every handbook should contain an Anti-harassment and Ani-Discrimination Policy that:

1. provides the state and local-specific characteristics that are protected from unlawful harassment and discrimination;

2. has a reporting procedure providing multiple reporting avenues for individuals to make complaints about harassment; and

3. emphasizes the employers commitment to maintaining a workplace free from such unlawful conduct.

Finally, Remember the Basics:

• Use plain language.

• Set clear expectations for attendance, conduct, and discipline.

• Include that the handbook is not a contract of employment and does not modify the at-will nature of employment.

• Include that the policies within the handbook may be revised, modified, or revoked at any time, with or without notice.

• Make sure that the company retains discretion and flexibility when making decisions.

• Ensure that you actually follow the policies!

If policies are outdated or no longer followed, that’s a clue that your handbook needs a thorough update.