As an employment law attorney, I am frequently asked to review or prepare employer handbooks. Some of the most common mistakes or omissions that I see can create real problems for Arizona employers. The following are the top ten mistakes that I see.
1. PST – Paid Sick Time
One common mistake is combining Arizona paid sick time ("PST") with other paid time off ("PTO"). PTO can generally be offered on any terms or conditions an employer wants, whereas there are strict rules that apply to PST in Arizona. By mixing the paid time off buckets together, the employer creates liability that can easily be avoided by maintaining separate buckets. Also, many PST policies contain unlawful provisions that can result in serious liability for the employer.
2. PTO – Paid Time Off
Arizona employers are generally given significant leeway to offer PTO under any terms or conditions they want. Yet, many employers don't take full advantage of the flexibility they have in offering PTO.
For example, an employer could have a PTO policy stating that an employee will not be paid any of their unused PTO upon separation. An employer could also state that an employee will not be paid their PTO if they fail to give two weeks' notice.
Many PTO policies also fail to address what happens to unused PTO when an employee is terminated. Other policies fail to address maximum PTO accrual limits or whether PTO is given as "use it or lose it."
3. Arizona Medical Marijuana
The Arizona medical marijuana law has been in effect for several years. Yet, many handbooks don't even mention it.
This is problematic because employers need to have a clearly defined "safety-sensitive" policy if they are going to maintain a zero-tolerance policy for certain employees. Any safety-sensitive policy should be clearly communicated to any potential hires and in the handbook. Employers also need to make clear what conduct is permitted because Arizona's medical marijuana law has some tricky nuances.
4. Complaint Procedures
Most handbooks state that employees should file complaints of harassment and discrimination to their manager or HR.
That may be fine in many cases, but the best practice is to have numerous individuals to whom employees may submit complaints. If the alleged harasser is good friends with the HR representative and/or their manager, the employee may not wish to file the complaint with either. Often times, the alleged harasser is the employee's manager, which makes filing a complaint with them problematic.
If possible, it is often a better practice to have several individuals in different departments to whom employees can complain. However, the handbook should clearly define which positions can accept complaints. If not, liability can be created for the employer if an employee complains to someone they reasonably assume has authority to accept discrimination and harassment complaints.
5. Too long!
Many employee handbooks are too long. They attempt to address every circumstance imaginable. This is problematic for several reasons.
First, employees are unlikely to read and digest all of the information in a lengthy handbook. If the discrimination complaint procedures are on page 70 of 100, an employee may not know where to file a complaint.
Second, if all of the employer's policies and procedures are included in its handbook, the employer may need to issue an updated handbook any time any of its policies change. This can be burdensome and confusing.
Polices that may need frequent review and updating can be referenced in the employee manual without providing all of the specifics.
Finally, an employer may contractually bind itself to any policy set forth in a handbook if it is sufficiently definite and clear to form the basis of a contractual agreement. It is often better to deal with each circumstance on a case-by-case basis. For example, some handbooks contain an unpaid leave policy stating the employer will give employees 12 weeks of unpaid leave, even though they are not a qualifying employer under the FMLA. The employer may wish to terminate an employee who requested such leave, but it may now be contractually required to grant such leave. It is often better to address each situation on a case-by-case basis, rather than adopting a formal policy for every possible circumstance.
6. Not asking enough questions
Employers should discuss their business and employment operations with their employment law attorney. This includes discussing which employees they consider exempt, as well as timekeeping and overtime practices. Employers should have a discussion about sales commission plans, fringe benefits, offer letters, and employment agreements.
It is a bad idea for an attorney to draft or revise a handbook without having a full understanding of the employer's business and employment practices.
7. Progressive discipline
Many handbooks contain a progressive discipline policy, which is generally a bad idea. An employee who is disciplined or terminated, in a manner inconsistent with the progressive discipline policy, can argue that the employer's failure to follow its progressive discipline policy is evidence of unlawful discrimination. Indeed, several courts have held that an employer's failure to follow its progressive discipline policy is evidence of unlawful discrimination.
Most progressive discipline policies state that egregious behavior can result in immediate termination, which is helpful in avoiding any presumption of unlawful discrimination. Employers, however, need to give serious consideration as to why they think it beneficial to maintain a written progressive discipline policy in the first place. Almost all employers progressively discipline employees, but that doesn't mean they need to reduce their practice to a formal written policy that can potentially be used against them in litigation.
8. NLRA disclaimer
The National Labor Relations Act ("NLRA") states that it is unlawful for an employer to retaliate against an employee because he or she has engaged in "concerted activity." Concerted activity generally means that an employee has raised concerns about wages, hours, or working conditions on behalf of themselves and others.
Many handbooks contain provisions that could be construed to prevent an employee from raising such concerns. For example, many employers state that employees cannot discuss their employment on social media. If the employer relies on such a policy to terminate an employee who engaged in concerted activity using social media, the employer may face liability.
Handbooks need to have a disclaimer, in bold, whenever a policy might implicate the NLRA. The disclaimer should state: "Nothing in this Handbook shall be construed to limit an employee's rights or protection under the NLRA."
9. Signed acknowledgments
The best practice is to obtain signed acknowledgment via email or some other electronic means, so that there is a permanent record of when and how the acknowledgment was signed. It's also important for the employee to have a copy of the handbook available electronically.
10. Regular updates
Employment law is always evolving. In the last three years, Arizona has adopted a medical marijuana and paid sick time law, both of which are complex and can result in serious liability for employers.
Employers should establish a relationship with an experienced employment attorney to keep up to date on changes in the law and ensure their handbook is updated accordingly.