If you employ independent contractors, you might consider developing a handbook with useful information for them. If you’re thoughtful about how you approach this it can be a powerful tool, although there are some important caveats.
The critical thing to understand is that independent contractors are just that: independent. If you treat your contractors like employees (and the IRS agrees), you could be liable for all the benefits, protections and compensation that employees are entitled to. Misclassification of employees can result in fines, penalties and IRS headaches. If you’re unsure, refer to the IRS definition of a contractor. Independent contractor relationships are best managed with a contract.
Additionally, don’t give your 1099 contractors a copy of your employee handbook, because you never want to muddy the line between contract and employee labor. It’s always a good idea to consult with an attorney to ensure you have correctly classified whether your workers are employees or independent contractors.
With that out of the way, it can be useful to provide guidance to your contractors about how your company operates, your mission and how they fit into that equation. For this, a Contractor Standards Guide can be helpful. Although similar to an employee handbook, a Contractor Standards Guide can serve as an abbreviated guide for your company policies and expectations for independent contractors.
Some items that CAN be incorporated into your 1099 independent contractor handbook include:
- Your mission statement, vision for the company and how they fit in
- Company specific information like where to park, how and when they can gain access to facilities, and when certain events usually occur
- Details about your company culture and practices
- Health and safety information
- Smoking policy
- Guiding principles
- A reminder that independent contractors exercise independent control in how they approach and complete a project and that they are responsible for obtaining and using their own tools and equipment to complete their tasks.
Some items that SHOULD NOT be included in your contractor handbook include:
- Information on benefits including paid holidays, vacation, probationary periods and insurance.
- Independent contractors are not subject to minimum wages, overtime compensation, employee benefits or tax withholding, so don’t include this language.
- Promises of future employment. Contractors are not subject to unemployment compensation after job completion or termination, they are hired on a per-job basis with no promise of future work.
- Independent contractors are not subject to workers’ compensation in the event of injury.
- Dress code and disciplinary policies.
- Pay periods not defined by contracts or through invoicing.
- Attendance policies, time off and leave policies, performance reviews.
While independent contractors exercise a great deal more control over how they represent themselves and how they complete the project assigned them than W-2 employees, communicating your company’s integral message is great way to showcase your expectations while allowing your contractors to exercise independence.
Note: An Independent Contractor Handbook is provided with Comprehensive Handbook.
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Much can be lost in translation when employees with a poor grasp of English are forced to sign a handbook without fully understanding the policies contained therein. Your handbook is your protection, but if it can’t be read and understood by your employees, it does you no good. If language is a barrier between your employees and your employee policies, clear communication is the best way to overcome that barrier, and a Spanish-language handbook can help break that barrier down.
In 2012, a Colorado judge ruled in favor of 9 Spanish-speaking employees who, unable to read the English version of the handbooks presented to them, did not know the correct protocol for reporting the sexual harassment they were experiencing. The company would later settle the lawsuit for $255,000, a high price to pay for having all the right policies in place, but a poor grasp on how to communicate those policies to its non-English-speaking employees.
Companies need to communicate their policies, standards and procedures clearly to all their employees. A Spanish employee handbook removes any barriers.
An outdated employee handbook can spell trouble! Here are a couple of the most common policy problems we see in HR Policy Manuals:
At Will Employment
Some handbooks contain a statement that indicates an “at Will” relationship can be changed is if CEO or President of the company signs a statement indicating that the relationship has changed. The National Labor Relations Board (NRLB) indicated in a complaint that such a statement implies unionization is futile.
Does your employee handbook explicitly say you can’t use language about your employer that present it in an unflattering light? Sorry, that’s a first amendment issue and can’t go into the handbook.
Discussion of Compensation
Ditto the above. You can’t keep employees from sharing this information.
Social Media Policies
Policies that are too broad and have specific prohibitions about sharing unflattering opinions of company employees are probably too broad. They shouldn’t be included in your handbook.
You can’t force employees to waive their rights to a class action lawsuit!
Take a hard look at the language in your policies. It can keep you out of hot water.
Once considered junk paper by employees and a dull way for a company to cover its own hide, Employee Handbooks are getting a facelift and a rewrite. Here are seven reasons why your company needs an Employee Handbook:
The workplace is sometimes a murky place to navigate. You have a meeting of minds, a clashing of personalities, a range of talents and probably a pecking order too. You’re all in this workplace together. The Employee Handbook serves as a guide that applies to everyone from intern to owner and sets the standard of treatment and shared vision.
Answer hard-to-ask questions.
How are performance issues addressed prior to termination? What does an employee who has an issue with a supervisor or coworker do? Established employees don’t necessarily wonder if they have bereavement, medical or maternity leave until they need it. New hires, who are typically overloaded with information, need something they can refer back to. Make life easier. Put the answers in your Employee Handbook and save everyone some awkwardness.
And the not-so-hard-to-ask questions!
If you employ managers or supervisors without providing an Employee Handbook, chances are you have given them unnecessary work. Do we get Presidents’ Day off? Do we get Black Friday off? Can I wear jeans? Flip flops? So, how is my vacation tallied again? Will I get a yearly performance review? Do I get time and a half for working on a holiday? The Employee Handbook is a resource that employees can use to plan their personal lives, without having to ask a supervisor every time they need to refresh their memories.
Provide a recipe for success.
An employee looking to advance will embrace your company’s values, work to meet and exceed your expectations and embody the information contained in the Employee Handbook. What are your expectations exactly? An old, out-of-date Handbook that doesn’t reflect where your company is today isn’t going to help your next superstar rise.
Do you think your company’s values, culture, expectations, etc. are implicit in the vibe you put out or the mood in the break room? Think again. Your Employee Handbook helps set the tone, direction and essence of your company. Your Handbook is how you sell your company to your employees.
Put it in stone.
Not everything you read is true, until it shows up in the Employee Handbook. Your content is your company’s truth. You can state your goals, lay out your policies, repeat your mantra, inform your employees, cover your bases, and repeat your mantra. (Getit?) Make your mission resonate in one go-to guide.
Protect your company!
Your Employee Handbook is your first line of protection against litigation. Spell out your policies proactively and save yourself from future lawsuits.
Many companies are retooling their Employee Handbooks to delight and inform their current, and often prospective, employees. Because Employee Handbooks are evolving to encompass company culture, your Handbook ought to jibe with your workplace feel.
A Handbook that is properly designed and executed will hone into your company’s ethics, emotions and logic. The new Employee Handbook is a company culture delivery wagon. These days, employees don’t mind reading the Handbook, in fact, they’ve started embracing it, as long as your Handbook includes one or more of the following:
Digital or interactive format
Handbooks are no longer intra-office paperweights taking up drawer space. Many Handbooks are being redubbed “Culture Books” and are no longer marketed to only current employees. Prospective employees can now access many Handbooks online and dial into the company culture before beginning the job application process.
Not just a list of company demands, your Handbook is also an inside look at what your company can offer its employees. Think beyond standard benefits packages. Perks are a great way to ramp up in your Handbook. A few sought-after company perks include:
A great Holiday Party
A softball/dodgeball team
Supportive of continuing education
Don’t overlook the look of your handbook. Many companies are passing on the binders, plastic presentation covers, and hole-punched or spiral-bound floppy copies of drabness, instead opting to have copies hardbound or otherwise aesthetically assembled.
Increasingly, employers such as Zappos, whose Culture Book has gone viral, have discovered that hiring an employee whose personality matches your company’s culture outside of work is obviously more likely to be a better fit than someone who wears one face on the job and another off the clock.
This mindset has led to an uptick in companies who use their Handbooks to cover more than legalese. In fact, some companies have begun to relegate legal liability documents to other sets of employee paperwork, freeing up the Handbook (or “Culture Book”) to inspire current employees while recruiting new ones.
Is conflict between employers and employees inevitable?
How you answer that question will shine a light on how you view your employee handbook. A good handbook makes your expectations clear. Your employees won’t have any ambiguity on your policies, standards and procedures. It may not prevent the conflict, but it can help you when conflict arises. And it may keep you out of court. When it comes to protecting your company, the best approach is often having clearly stated policies and following them consistently.
Many employment problems come from charges of favoritism, discrimination, harassment or wrongful termination.
Here are a couple must-haves for your handbook:
A disclaimer for your Handbook itself
The Handbook should never represent a contract for or offer of employment and cannot possibly cover every workplace situation, nor is it designed to, and the policies can change at any time.
An At-Will clause
As an employer, you can terminate employment at any time, for any reason, with or without notice, with few exceptions. (Montana is one.)
An Anti-Harassment policy and an Equal Employment Opportunity (EEO) policy
It is important to have a detailed procedure laid out for any employee who experiences harassment. This policy should include contact and procedural information for anyone who seeks to make a report or lodge a complaint.
Other Important Policies
Policies on Attendance, Tardiness, Dress Code, Smoking, Drug Testing, Substance Abuse,Confidentiality and Non-Competition.
Social Media and Internet clauses if your company has an online presence.
A Safe Working Environment clause
Industry regulations may require additional clauses (meeting OSHA requirements, etc.).
If your company employs over 15 people, you will also need to include disclaimers about Title VII and the Americans with Disabilities Act (ADA).
A Code of Conduct, applicable to all.
Your Employee Handbook is a living document that must be updated as laws change. Your Handbook should reflect your compliance with policy that can vary depending on State and Local laws. Be sure to check with a qualified professional about which laws are applicable to you.
Avoid being overly specific or making promises in your Handbook. You want your rules, policies, perks and benefits to apply to everyone. Putting procedures into writing and then following and enforcing these procedures not only creates cohesiveness among staff, it also provides employees with a clear path from disagreement to resolution.
Setting up a bulletproof Employee Handbook is simple.
Just don’t forget to collect a signed and dated acknowledgment form from every employee!