You might have an employee handbook you created years ago and assume you're protected from potential legal issues by it. However, especially in New York, you should update your handbook every year with all the new employment laws and changes.
By Larry Kagan, Founder & CEO, Baron Payroll
When's the last time you updated your employee handbook? Can you even remember?
If you're like many small business owners, you may have a dusty file folder that was last touched a decade ago that holds your employee policies.
Think of all the things that have changed in the past decade: So much more of our work is done online. New technology has altered the workplace.
And, in New York, the number of new regulations that have changed since then means your handbook is surely outdated. That could lead to trouble.
Creating an employee handbook with clear policies of acceptable behavior in your workplace is one of the most significant ways to protect your company. It is a strong line of defense against employee lawsuits or claims and can help you save on your insurance policies.
If you have employees in New York, you should have an updated employee handbook. Period.
Your handbook needs to be updated annually to ensure your policies reflect the current state of affairs.
Yet many small businesses don't bother, leaving them open to financial liability they can't afford. We get it: It's not top of mind, given all the work that goes into running a business in New York.
Thankfully, Baron Payroll offers a solution that's painless to your company, affordable, in-depth, and compliant with all the New York laws.
You must update your Employee Handbook
An employee handbook includes applicable federal, NY state, and local laws. It also sets clear expectations and details the company's internal policies outside of laws, on topics like compensation, time off, drug and alcohol usage, company vehicles, health, and safety.
Across dozens of pages, it covers what is out of bounds for the company, making clear what kinds of actions could result in termination.
The handbook certainly helps employees better understand their role as a worker. But the benefits extend far beyond that.
Insurance companies often ask to see employee handbooks to see what sorts of policies govern your company's activities. As a result, a company without an updated handbook is seen as riskier than companies that have one.
Instituting a handbook could show your insurance company you aren't a risky venture.
Policies in your handbook can prevent successful unemployment or worker's compensation claims, too.
For instance, we suggest including a policy in your handbook that calls for a drug test whenever an employee submits a worker's compensation claim. Testing positive for drugs can prevent the claim from being approved, saving money.
On the unemployment front, if a worker clearly violates company policies and loses their job, this can prevent them from receiving a check.
Perhaps the biggest avoided cost comes from fending off potential lawsuits. An employee who gets fired could file a wrongful termination suit. If you don't have policies to point to that show they violated your company's rules, they could succeed. But if you have an ironclad handbook, you're in a much safer position.
The handbook contains the laws and rules for the company. You can't fire anybody for breaking the rules if they don't know what the rules are.
Last year alone, NY added over 20 new regulations
The handbook alone won't save you from problems. And you can't just create one then let it sit for a decade. Especially in New York, You should be updating it annually.
Rules for employers change frequently: In New York, there were more than 20 new employment regulations added in the past year.
Some of them are significant and require major changes to your handbook. For instance, the state now requires paid sick time. Employees need to understand how that works, and you need to ensure you comply with the new law.
You don't want your company guidelines to be out of date; that could cause problems with the very things the handbook is supposed to protect against.
It's not just your business that could be financially impacted if the Department of Labor starts an investigation into compliance with state laws.
Business owners in New York can be personally liable for many of these wage and hour violations. The fines, penalties, and "double-liquidated" damages liability can be financially disastrous.
Even if you close your doors and business bank accounts, the DOL can still come after your personal assets, like your house. It's a terrifying prospect for you and your family.
Get electronic signatures from your employees proving they got a copy
In addition to updating annually, a company must distribute the handbook to employees, who have to sign an acknowledgment of receipt memorializing that they received the handbook. This prevents an employee from later claiming they had no idea there was a handbook with rules in it.
Each time the handbook is updated, employees again need to sign and acknowledge they received a copy of it.
We make this process straightforward. Your HR software can send an alert to employees, reminding them to read the handbook and sign the acknowledgment digitally. A copy is saved electronically in their HR file in the cloud, creating an easily retrievable record should the need arise to prove an employee acknowledged your handbook's existence.
Additionally, if your company has a handbook, its policies need to be followed. You can't play favorites or change policies on the fly because your practices mean more than the written word.
Your existing handbook may need some serious work. It may be something you put together after searching the internet for a template that allowed you to plug in a few items and cross the handbook off your to-do list.
That's garbage – it's worse to have a bad handbook than no handbook at all. Templates don't provide knowledge and expertise. You won't get personalized, state, and local information about New York laws and regulations that impact your business. You could unwittingly include erroneous information that you would be beholden to.
How Baron can help
You need a professional to help you get your handbook in working order and come up with a way to update it annually going forward. And we know some.
The first words that come to mind when thinking about human resources probably aren't "easy" or "simple." But the service we provide through our human resources partner is just that.
Most small businesses can't afford an in-house human resources department. Starting at $1,000 a year, you get unlimited access to a team of human resources professionals who know the NY state and local laws and will create a strong handbook for your company.
And that's just the beginning. You can also get human resources advice, chat with an HR professional, create detailed job descriptions and get your compliance questions answered about COVID-19, FFCRA, FLSA, WTPA, OSHA, ERISA, INA, FECA, FMLA, WARN, and EEOC -- just to name a few employment laws.
The updated New York handbook alone is worth the cost. We know you're focused on getting a return on your investment, and having an updated employee handbook may be the best investment you can make for your business.
You can save money on unemployment claims by preventing employees who broke company policies from receiving it. You can save on your time-off policies by having clearly defined rule for what happens upon termination – payout or no payout. You could save on your insurance rates. In the event of a lawsuit from a disgruntled employee, your handbook will protect against financial damage.
Think of our HR service, and the updated handbook we can create, like a gym membership: It keeps your company healthy.
Convinced you need an updated NY employee handbook?
Want Baron’s help to complete this critical task?
