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Welcome to the Workplace, a podcast by Cal Chamber. I'm Matthew Roberts, Associate General Counsel for Labor and Employment with the California Chamber of Commerce. Hello listeners. We here at Cal Chamber have wrapped up our New Laws seminars and webinars and we hoped everyone out there is up to speed on the new changes for 2025. One thing we mentioned at the end of our seminars this year were annual checklist reminders that all employers should work through at the beginning of the year, regardless if there is a new law or not around these checklist items. One of checklist reminder items is to review and update your employee handbook. These handbooks are often overlooked to start the year, but have so many benefits for employers when they're done right. So to help overcome some common errors in handbook construction, we welcome back Vanessa Green, Cal Chambers employment law subject matter expert. Thanks for being here with me today, Vanessa.

Thanks for having me, Matthew. I love handbooks, so I'm super excited about this topic.

All attorneys do. I know they're not the most fun thing to work on for employers, but attorneys, we just eat these things up.

Absolutely.

Yeah. Even though they're not usually on the forefront of our employers minds, there are a lot of issues to consider with regards to employee handbook, so let's just jump right in. Okay. Despite no legal requirement to have an official employee handbook, why are these still vital for compliance?

There's a few different reasons why we highly, highly recommend having a handbook. So I think number one is it shows that you are being compliant with state and federal laws, which anytime we get the opportunity as an employer to show compliance, we want to take it. Right. Especially in California. So these, having these legally compliant written policies can help us like defend against legal claims. I know Matt, you and I used to defend employers and let's say for example, meal and respite claim. Right. What's the first thing we're going to ask the business for? Like do you have a written policy? Give us your policy so we can help defend you against your claims. So that's I think one of the top reasons why these are really important. But some other reasons for importance are these really act as a guide in our workplace, not just to our employees to in regards to like the expectations that we have for them and our policies and procedures that we want them to follow, but also for our supervisors and managers because they're the ones out there really enforcing these policies in the workplace. Right. So this is a reference tool for them to help them know what our policies are and how to enforce them consistently in the right way.

Yeah. And I think it can't be overstated, really, how much use it has as a reference for our HR personnel and our managers and supervisors. You come to one of our leaves of absence seminars, you're gonna get hit in the face with about 25, 30 different leaves of absence. And who can keep track of that? Like, it's difficult for us to keep track of all of that. But when you have the right policies in your handbook, it helps that you can go back and say, okay, if somebody's coming to me, and they have. They maybe unfortunately were the victim of a crime or abuse, then we've got this policy about the kinds of leave that they'll be eligible for. And so, like I said, I don't think that can be overstated. So, Vanill. Vanessa, I understand that you have experience assisting employers with handbook creation and review. What does your experience tell you about employers handbooks? Just generally that you've seen?

Well, what I've seen is that I think sometimes employers might underestimate how complicated this process is to not just to create, but to maintain a compliant handbook, particularly in California. And so sometimes because of that complexity, we see a lot of mistakes, unfortunately. And there's things that are confusing. We see things that contradict. We see things that don't make sense for the workplace, and that can lead to liability and risk, and even some legal issues can come up from that.

Okay, so speaking of mistakes, I think this is a good spot to kind of jump into some common errors that we see with handbooks. What's the first major common error that you regularly see?

The first one I see all the time is using either, like, an outdated handbook where it just does not align with the current laws, or some kind of overly generic template where it doesn't align with your company's practices. So, like, I've seen this happen time and time again. I'll work with the business on updating their handbook, and I'll be looking through it, and I'll see, oh, there's a remote work policy in here. Do you all do remote work? You don't have that, do you? No, we don't. Like, why is it in your handbook? And, oh, well, our buddy owns a business and they gave us their template, and, you know, one thing led to another, and they didn't really look through it and customize it for their workplace. Right. So that's definitely an error I see all the time.

Yeah. And it's funny you should say that about policies that, you know, you have that you may not use or that you might copy from another person's handbook or a template, as you see, because let's take vacation policies, for example. They're totally optional for our employers. You don't have to offer vacation. But I think in 2025, it's a very rare business that doesn't offer vacation because you need that to be competitive, to retain talent. But despite the fact that they're optional to have the policy, if you do end up having one, there are several rules that come into play, like caps on the accrual or compensation after termination for vacation time. So we know that even though the handbook isn't required, laws can dictate what should be in your policy when you do have the policy. What's one of the biggest laws that you're aware of, Vanessa, that impact employee handbooks that employers may not actually consider?

So one of the biggest legal challenges impacting employee handbooks is the National Labor Relations act, the nlra. And this is particularly after this case that we had called Stericycle, which I'll talk about in a second. But a lot of employers assume that the NLRA applies only to unionized workplaces. That's not actually the case. It applies to all private employers. And what it does is it protects employees rights to discuss things like wages and working conditions in terms of employment in their workplace. And so we had this stere cycle case that really changed how the National Labor Relations Board evaluates handbook policies. And so now if a policy can be interpreted as restricting an employee's rights, even if that wasn't the intent of the employer, it's probably going to be deemed unlawful. And so an example of this could be like, let's say you have a workplace civility policy in your handbook and you broadly prohibit things like, you know, no negative comments in the workplace. Well, that could be unlawful if it, you know, discourages your employees from voicing legitimate concerns that they have about things like wages or working conditions or unfair treatment in the workplace, because we know they have the right to discuss those things. That's legally protected. So we need to be really careful about the way that we word our policies. Now, we wanna make sure we're balancing our business interests, but we're also not having overly broad policies or things that could be interpreted to chill employees rights under the nlra.

Okay. And because the law that impacts employee handbooks, or the laws can change with different statutes or new regulations, or as in the case of the Stericycle decision with litigation, that creates a whole new rule for us. How important are upd to the handbook themselves. And what are some of the issues you saw with handbooks that were out of date, as you had mentioned, as one of the common errors you saw?

Yeah, I mean, having an up to date handbook is so important. We want to do this every year at the end of minimum, but also be updating regularly throughout the year as we have new laws that come up and change. And one of the biggest things I see when we have an outdated handbook is our policies no longer aligned with the current laws. So, for example, you know, if you have a leave policy that doesn't reflect changes in laws like paid sick leave, you know, back in the beginning of 2024, we had changes where paid sick leave in California increased from 24 hours a year to 40 hours a year. Right. So if your policy is out of date and it's not tracking with the current law, then it's not going to be compliant.

Yeah. And that's really kind of an interesting part of this. So when we're talking about updating these handbooks, we're looking at this as an every year kind of deal. Story time. Vanessa, give me this story. What is the oldest handbook you saw on review? When you've done a review, I'll tell you mine. It was back in like 2007, was the last version of the handbook. So I was doing a handbook that was more than a decade old when I did this. And that's an extreme example. But what are some of the, you know, some of the older handbooks that you saw that, you know, really give rise to this problem?

Yeah, I've seen some old ones. I don't know that I've seen 10 years. I would say probably like five to seven years on average. But another issue is when the handbook doesn't match reality. And that's something that I saw happen all the time where I would read a handbook and there'd be this progressive discipline policy in the handbook where always going to start with a verbal warning and you get one warning and then after that you get two warnings. And I'd ask the business, are you actually doing this? Are you following all these steps? And they're like, well, no, we don't do that. Well, why is it in your handbook if you're not doing it right? I think one of the biggest things we want to think about with our employee handbook is we do not want to have something written down that we're not following in practice. Right. We want to make sure those things align. That's really, really important.

Okay, good. So we've gone through some of the kind of the common errors and the what's and the whys of why we do this on a very regular basis. Not every 10 years, everybody. Every year really is your best practice. And even throughout the year, as litigation can sometimes change the rules. What are our best practices? Once we have a good handbook going and it's up to date, what are some best practices around rolling out that handbook to ensure maximum effectiveness? Because that's really what we're trying to make with this document, is a very effective compliance tool for us.

I think that's such a great question, Matt, that you asked, because sometimes employers forget about this part and it's really important. So when we roll out a handbook, it's not just about distributing the handbook to our employees. Of course that's part of it.

And.

But we want to make sure that our employees really understand and follow the policies in the handbook. So a few things we always want to do. We always want to have some kind of superseding language in an acknowledgment or in our handbook that explains this new handbook. It's going to replace the previous versions of our handbook. We want employees to sign an acknowledgment form confirming that they've read and received and understood the handbook. But it shouldn't stop there. We really want to make sure that employees actually understand what's in the handbook. Let's be real. Are they really going to read the handbook? Probably not. Right. So I highly recommend doing something like a company meeting, a rollout meeting, or at least something where you're kind of going through the handbook with them to explain what the changes were, or if it's a new handbook and you've never really talked to them about it, go through it so that they understand what's in there and what the expectations are. Now, that's not just for employees. That's super important for your supervisors and managers as well. And some companies, I think this is a great thing, some companies will have like a separate rollout meeting just for their supervisors, managers, and HR to kind of get more in depth on the policies and how do we enforce these properly and not too strictly, but make sure that we're maintaining compliance throughout the whole organization in a consistent way. Right. We want to be thinking through all these things. So it's not just about, oh, here's your handbook. We got your signed acknowledgment, and we're good. We really want to think through, like, practically, how are we setting ourselves up for success in our workplace. With this handbook.

Yeah. And I want to follow up on that last point, because that point is super important about training your managers and your supervisors, because as we know, we got that PAGA reform, private Attorney General act reform that took effect last year in June 2024. And one of the components to helping you comply both with the law, just generally, but also to help reduce penalties under that specific law is to train your supervisors and managers on wage and hour issues. So when you go back to something like a meal and rest break and what does your policy say about meal and rest break? Like you said, when we're looking to defend these kind of claims, what does it say? It says, this is how we give a compliant meal and rest break. And that is we relinquish all control over you. We relieve you of all duties. And because the managers and supervisors are the ones who are overseeing, giving the breaks, it's really important for them to understand what those terms really mean in terms of I am really relinquishing all control over them. I am not interrupting them. I am letting them sit there for their 30 minutes or hour, whatever break you end up giving them, so that that way they really understand what the law requires of them. As opposed to, like you said, Vanessa, just throwing the handbook out there, getting a signed acknowledgment back and checking the box, right?

Yep, exactly. So critical.

Okay, so we've spent about a dozen minutes talking about this and already have hit a lot of areas of complexity. This seems like something, Vanessa, that employers shouldn't go it alone on in terms of creating and updating handbooks. Right.

I would not recommend going it alone. It's just complex. And we're in California. You all know how complicated things are here. I mean, we have a whole profession out of it. Right. Just to manage all of this stuff. So I highly recommend using some kind of, like, employment law expert, HR consultant. There's all kinds of tools available that you can utilize to create your handbook, having a professional review of your policies to make sure that things are legally sound, that it's really customized to fit your company's actual operations. I think it's critical. And of course, because, you know, I love Cal Chamber and I'm part of the Cal Chamber team, I have to just give a shout out to some of the tools that we have that I think are amazing for employers. We have this awesome tool called Employee Handbook Creator that folks can use to create a customized, compliant employee handbook. And not only do we have that, but we have an add on that you can purchase called Employee Handbook Creator. Plus, if you want to go through the handbook creator process with one of our employment law experts like myself or Matt, you can purchase that add on and we will walk through it with you and really be your guide through the whole process of developing your handbook. So I think there's a lot of great tools out there and I highly recommend that employers, you know, do your research, find what's going to work for you, and get a good partner to help you through this process.

Well, thank you, Vanessa, for sharing your career experiences as you'd spent years going through these handbooks for this wonderful discussion on cleaning up our employee handbooks so that our employers can help put their best foot forward towards legal compliance.

Absolutely. Thanks for having me, Matt.

And thank you listeners for joining this discussion on the workplace. Please share and subscribe to Cal Chamber's podcast by visiting calchamber.com.