Employee handbooks are important tools to help establish employee expectations, address workplace issues and defend against potential lawsuits. Failing to update employee handbook policies regularly can make businesses vulnerable to legal risks and liabilities, resulting in costly fines, penalties and attorneys’ fees.
Here are four employment policies to consider reviewing in 2023:
More employees are demanding pay transparency as a result of changing labor markets and workforce demographics. With demands for pay transparency increasing, some states—including California, Colorado, Connecticut, Maryland, Nevada, Rhode Island and Washington—have passed legislation in recent years requiring employers to be transparent. Some cities, including New York City, Jersey City and Cincinnati, have also passed such laws.
As applicable laws and regulations related to pay transparency vary based on jurisdiction and employer size, small businesses must consider their legal obligations. Considerations involve the jurisdiction where employees physically work. Some jurisdictions’ laws only require employers to provide pay ranges if the candidate requests it; others require employers to disclose this information upfront.
In 2022, many states and localities enacted paid leave laws. This year, several previously enacted leave laws became effective in various states and cities throughout the United States; many other states have recently proposed paid leave legislation. These laws ensure workers continue receiving a portion of their wages when they’re unable to work under certain circumstances, such as due to illness or the birth of a child.
Because of the increasing number of states and localities adopting paid leave laws, small businesses must ensure their leave policies are current and comply with local laws. It is critical to review existing policies to confirm they conform to state and local regulations of the location where employees physically work.
An employer’s leave policies can clearly explain when employees are eligible for paid leave and provide any steps they must follow to request it. Small businesses should also verify their leave policies do not unintentionally discriminate against employees based on a protected class.
Federal law requires employers to reimburse employees for expenses that cause an employee’s pay to drop below the federal minimum wage. However, some state and local laws require employers to reimburse employees for work-related expenses, such as telephone or internet fees, office supplies, and heating or cooling costs. Employee expenses are considered wages under several state reimbursement laws and are subject to the same timing requirements as wage payments. Additionally, when small businesses reimburse employees for office equipment or devices, it may create issues about who owns the item.
The number of lawsuits claiming employers failed to reimburse employee expenses is quickly rising, so it’s vital that small businesses ensure their reimbursement policies comply with state and local laws.
Outdated policies can often expose your business to unnecessary legal risks. Regularly reviewing and updating employment policies is an effective and low-cost way to protect your business. By understanding the most important sections to review in 2023, you can take steps to ensure your employment policies are current and reflect the most recent regulatory developments. You may want to consider conferring with local legal counsel if you have questions or concerns regarding pay transparency requirements.