You’ve been working hard to set up your business and you have finally decided it’s time to hire staff.
At this stage, you probably don’t have an HR department which can help you with this responsibility, but employment regulations are complex and without even noticing you could end up in an employment lawsuit.
Maintaining a healthy employee relationship is critical for employers. Studies show it can be the key to the success of an organisation and it can lead to more productive, efficient, loyal and less conflictive employees.
As a busy entrepreneur, you’ll need to ensure desired workplace behaviour is clarified or reinforced for each new employee and all the legal regulations are in place.
Tips for avoiding legal problems with employees
When hiring no one expects to end up wrong with an employee but conflicts are not unusual, so here are some tips to keep in mind before introducing new team members to the business.
- Hire the right employee: match the candidate’s business style with the company’s business style and check references.
- Classify your employees properly: it is an independent contractor or an employee? Wrong classification can lead to liability for uncollected tax, issues with employee benefit plans, etc.
- Communicate: clearly articulate performance expectations and give feedback on whether those expectations are being met. Inform about procedures and changes so employees don’t get surprised.
- Do not ignore problems, discrimination or harassment: follow up on complaints with thorough investigations and appropriate discipline.
- Train your employees: help improve their skills and make sure they know the policies, expectations of behaviour, and how to address issues.
- Terminate employees the right way: plan the process, document and support the decision to avoid being accused of discrimination.
- Put in place an employee handbook: this document contains workplace rules, standards and procedures and it can help prevent employment related legal issues down the road.
What’s an employee handbook?
Often called a Staff Handbook, it is a formal outline of the company’s expectations regarding performance, it provides an overview of the benefits provided to each employee, and generally summarizes the relationship between the employee and the employer.
Employee handbooks protect businesses from legal liability by demonstrating the company’s compliance with employment regulations and serving as a reference point if an employee later challenges you in court.
That’s why you should ensure all employees sign an acknowledgement form stating that they received the handbook and that he or she understands and is willing to comply with it.
On the other side, you must fulfil the policies outlined in the handbook and provide all the benefits promised. It’s not a compulsory legal document but it is really important for avoiding potential legal problems with employees.
What to include in an employee handbook?
Some courts and employees interpret the language in staff handbooks as a contract that creates binding obligations on employers so make sure all policies are clear to avoid legal problems with employees.
What to include will vary through businesses but some key policies are the following:
- Sickness absence: provide a clear framework for reporting, managing and recording sickness absences and the procedure for prolonged or frequent absences.
- Complaint procedures: ensure that there is a proper procedure for employees to raise concerns so you can maintain good employment relationships, prevent small issues escalating into big problems and avoid costly claims.
- Performance and evaluation: implement a process to improve and identify any underlying causes in the event of an employee’s poor performance.
- Discrimination and harassment: include a policy on how victims should proceed and what actions should be taken.
At Linkilaw, one of our core values is to promote compromise over conflict and build bridges instead of burning them so we recommend to get legal support for making sure your employees’ contracts are compliant with all legal regulations and we encourage all entrepreneurs to put in place an employee handbook.