Every design firm needs to have a comprehensive employee handbook. Quite separate from employment agreements that are specific to particular individuals (as discussed in a previous article, “Employment Agreements for Designers”), the handbook applies equally to all staff members. It documents general policies and rules and helps shape the overall culture of the company. In this article, we’ll provide guidance to design firm owners and managers on the essential contents of this important document.
In the United States, companies are not required by law to create an employee handbook. However, if there is a handbook in place and an employee brings a lawsuit against the employer, the current trend is for the court to regard the handbook as a legal document. A well-researched and well-written handbook indicates that you are aware of, and that it is your intention to comply fully with, state and federal laws regarding employer/employee relationships. It clarifies standard practices and expectations, demonstrates that they are consistent and reasonable, and helps to create a level playing field where all employees can excel.
Typically, the handbook is provided to each new employee at the time of hire. To set a warm tone, many handbooks open with a section on the company’s history, an overview of what the firm does, and an explanation of how it’s organized. Beyond that, the handbook is likely to include the following sections and topics.
General Standards of Business Ethics
- Equal employment opportunity
- Anti-harassment policy
- Immigration law compliance
- Policies regarding use of company property and supplies
- Policies regarding potential conflicts of interest (this is a particularly important issue if your creative firm buys third-party goods and services on your client’s behalf)
- General expectations for employee performance
- Orientation for new hires
- Standard working hours, including the timing of breaks and meals
- Attendance and punctuality requirements
- Performance evaluation process
- Performance counseling and conflict resolution
- Disciplinary procedures
- Termination of employment
- Confidentiality of personnel records
- Policies on providing employment references
- An explanation of the difference between part-time and full-time status (which may have an impact on eligibility for benefits)
- An explanation of temporary status (temporary positions such as student internships may have limited eligibility for benefits)
- A clarification of exempt/non-exempt status in regard to overtime pay. (On a related note: employees who are exempt from overtime pay sometimes ask for compensatory or comp time. However, comp time is not usually stated as a formal policy. Design firms tend to negotiate it on a case-by-case basis. Once a firm has established a precedent, however, it must be followed in a consistent way.)
This will have been stated in each person’s employment agreement, but chances are the handbook will reiterate the important fact that staff members are employed “at will” rather than for a fixed duration.
Up to this point, most of our handbook contents have emphasized things that the company expects from employees. In contrast, the next few sections describe benefits that the company is providing in return.
- Explanation of pay periods (such as bi-weekly or semi-monthly)
- Information about the direct deposit system (if there is one)
- Group health plan (typically, this will be either a Health Maintenance Organization (HMO) or a Preferred Provider Organization (PPO), and detailed paperwork from the insurance company will be provided separately)
- Disability insurance
- Life insurance
- Workers’ compensation insurance
- COBRA (this refers to short-term continuation of insurance coverage after termination or layoff, but it only applies to companies with 20 or more employees)
In most design firms, this section will explain a qualified retirement plan, which is any plan approved by the IRS for favorable tax treatment. The most common category is a defined contribution plan, meaning that the amount available to an employee upon retirement will depend upon the amount that the employer and/or employee contributed to the plan over the years of employment. Each defined contribution plan has different rules and contribution limits. An official plan document (often referred to as a “Summary Plan Description”) will be provided separately, including details about eligibility for participation. It’s most likely that you’ll encounter one of the following types of plans:
- 401(k): This is a tax-deferred savings plan that allows employees to save through payroll deductions. Depending on the details of the plan, the employer may have agreed to match a portion of the employee’s contribution.
- Profit sharing plan: In this type of plan, the employer contributes a percentage of company profits. That amount is prorated across eligible participants and placed into tax-sheltered individual accounts.
- Paid holidays (a list of major national holidays when the office will be closed)
- Paid vacation time
- Educational assistance
- Employee fitness, such as a gym membership
Guidelines for Time Off from Work
- Medical, dental, and other appointments
- Paid sick days
- Unpaid leaves of absence
- Jury and election duty
Toward the end of the handbook, a few miscellaneous items will be added:
- Work confidentiality (covering external client information as well as internal business practices)
- Policies regarding project expenses and travel
- Policies for telephone use, Internet access, and electronic mail
- Bulletin boards for posting of required government notices
- Dress code (if applicable to your firm)
- Smoking policy
- Policies regarding alcohol and drug use
- Office and building security
- Workplace safety
- What to do in emergencies
Acknowledgment of Receipt
On the last page of the handbook, there will be a place for the employee’s signature, indicating that he or she has received the handbook and understand the contents. This signed form is kept in a personnel file. If the employer later has to enforce a particular policy or rule, this demonstrates that the employee was aware that the policy existed.
Where to Find More Information
If you’re in the process of putting together an employee handbook for the first time, or if you need some help in revising an existing handbook that’s gotten out of date, here’s a useful resource for you: Create Your Own Employee Handbook: A Legal & Practical Guide by Lisa Guerin and Amy DelPo, published by Nolo.
One Final Bit of Advice
As soon as you’ve prepared a draft that you’re comfortable with, have your attorney review it before it’s distributed to any staff members.