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Employee Handbook Basics & Why It's One of the Most Important Documents In Your Restaurant

by Alisa Pittman, Esq.

Communicating personnel policies, work rules, expectations, benefit plans, and overall organizational philosophy to employees is vitally important to any business. In a business like yours, which leans on well-trained and -informed employees to provide service that distinguishes your house from the place down the street, providing this information in a quick, understandable format is especially important.

And while we would wish that employee turnover in our business was lower, many restaurants have a constant stream of new hires. Well-drafted, easy-to-understand work rules are imperative to getting your people up to speed with your restaurant's culture. In fact, good communication and documentation often increases employee retention, as it fosters trust and builds employee confidence that you know what you're doing.

Effectively communicating information to employees that will ensure they get your message is not as daunting as it seems and can be accomplished by a single medium -- the employee handbook. A properly drafted and disseminated employee handbook is the "bible" of your employee communication and employment liability risk management program. Every business -- large or small -- needs one.

A sound employee handbook can prove beneficial in a number of ways, including improving employee morale, avoiding litigation, and increasing consistent application of workplace policies and discipline. From an employee perspective, the employee handbook provides guidance, sets expectations, and provides information regarding policies and procedures that apply to the workplace. The employee handbook can also prove a valuable resource for employees with respect to employee benefit plans and free up managers' time from answering questions regarding such programs.

As for employers, the greatest benefit that an employee handbook can provide is the legal protections that can be secured by properly drafted and disseminated policies and procedures. An employee handbook can legally protect an employer in a number of ways. For example, unfortunately, in today's workplace, an employer can be held liable for the bad behavior of an employee (or even a customer), especially when that behavior injures or otherwise negatively affects other employees, customers or individuals. Clearly establishing a set of behavioral expectations can go a long way toward establishing that an employer is not contributing to the employee's bad behavior. Setting clear performance and behavioral expectations can also help the employer consistently spot and address violations. Relying on loosely defined standards that are not properly documented, violations become subjective and open to interpretation. The result of such ambiguity is often inconsistent treatment, which can lead to litigation.

Employers often adopt exhaustive written personnel policies that govern relationships with current employees because they know that a written policy can be an effective tool for defending lawsuits. But putting policies and procedures in written form also provides practical benefits. From the manager's perspective, the employee handbook, if written properly, regularly updated, and consistently provided to employees, can serve as a tool for communicating performance expectations, establishing applicable work rules, setting disciplinary policies, and telling employees about the benefit plans that the employer offers. An employee handbook can also provide support to your managers. When faced with a personnel issue, an employee handbook can provide guidance and certainty to the decision-making process.
start quote. . . a written policy can be an effective tool for defending lawsuits.end quote
-- Alisa Pittman, Esq.
 

To be effective, however, the key to developing an effective employee handbook is to devote the time and resources necessary to tailor the policies to your business, goals, and workforce. It is an investment that can pay dividends in increased productivity, improved employee morale, and minimized litigation.

One Size Does Not Fit All

You'll find a number of companies that offer software to create employee handbooks and/or consulting services to write them for you. Just know there is no single template that is right for every business; moreover, state-specific employment laws often need to be addressed. The actual policies adopted and included in an employee handbook will vary from company to company and will depend in large part on size, number of employees, benefits offered, and other factors. A small family-owned restaurant, for example, generally does not require as many written policies as a nationwide chain with a large, diverse workforce.

Nevertheless, regardless of the size of your operation, it is essential to take the time to think through the policies and have at least a minimum list of policies that need to be included in the handbook. The following guidelines address the most important and industry-specific policies that should be included in the employee handbook of any restaurant. In addition, this article provides a brief discussion regarding other policies that can and should be included in the employee handbook in most cases, but such may not be industry-specific or as important as the issues to which more discussion is given. Even then, however, the list of policies is not exhaustive and consideration should be given to each company's particular needs. You must make sure you understand the policies that you include in the handbook, as the examples provided here might not be appropriate for all situations. There is a wide range of policies that you will want to consider for the handbook. Many of these policies have developed as a result of new statutes and litigation, which raise new issues continuously. Accordingly, you should discuss these issues with an attorney or human resource professional who specializes in employment policies or employment law for restaurants to ensure that your policies are correct and remain current.

Must-Haves

Disclaimer. The first page of the employee handbook should be a disclaimer, which provides that the handbook is merely a guideline and not a contract of employment. Some states have very specific statutes, such as South Carolina, regarding how the disclaimer must be written. Typically, the disclaimer should be set out in the text, such as in all-bold capital letters. It should clearly state that the employer has the right to amend, modify, revoke, and interpret the policies in the handbook at its sole discretion. It should further state that the policies are not meant to modify the at-will status of employment.

Introduction. The introduction is an important part of the employee handbook not so much for legal reasons, but from a practical standpoint. This is often one of the company's first opportunities to welcome the employee. As you know, first impressions are important and the introduction to the employee handbook should describe the company, its mission, values, and beliefs. While an employer should not attempt to include its entire business philosophy in the handbook, it should include a few key statements so that the employee can learn about the company from the very beginning. At a minimum, the employer should include the mission statement and a brief description of the employee's role in fulfilling that mission. The introduction may also include a brief statement of the company's history and accomplishments. Oftentimes, the introduction is put into the form of a letter from the restaurant's owner. This is a nice touch that adds a personal feel to the process and can make new employees feel more connected to the company.

Equal Employment Opportunity. Every handbook should include a brief outline of the restaurant's policy with respect to equal employment. From a legal standpoint, the equal employment opportunity policy serves to put employees and managers on notice that discrimination will not be tolerated. In addition, absence of an equal employment policy could send an unintended message to the employees, i.e., that the employer is not concerned with diversity or nondiscrimination. If you are required to maintain an affirmative action plan, that fact should be included, but it is unnecessary to include the entire plan. The following is an example of a very basic equal opportunity statement:

XYZ Restaurant is an Equal Opportunity Employer. We will extend opportunities and benefits to employees without regard to race, religion, color, sex, national origin, age, disability, handicaps, or veterans status. This policy confirms XYZ's commitment to fair employment and the elimination of discriminatory practices that might exist.

Once the introductory materials are completed, the employee handbook should then address the general employment policies of the company. The following are a few employment policies that are especially important in the restaurant industry.

Attendance Policy. Attendance policies are a vital part of any employee handbook, but can be especially important in the service industry, as excessive absenteeism can be especially harmful to your ability to serve customers. No manager wants to be regularly understaffed during important hours of operation such as weekends and peak dining hours. While attendance policies are complicated by laws and regulations such as the Family Medical Leave Act, it is nonetheless a good idea to include a complete, yet concise statement about attendance -- this policy can be used to ensure that there are no misunderstandings about expectations of attendance and punctuality.

In addition, because restaurant employees, especially servers, regularly swap shifts or wish to have shifts "picked up" by other employees, the attendance policy should include proper protocol. For example:

Employees are expected to arrive at work prior to their scheduled start time and be at their workstation and ready to begin working by the scheduled start time.

All time off or schedule changes must be requested and approved by a manager, in writing, in advance. XYZ views attendance as one of the most important facets of your job. All unapproved absences will be noticed in the employee's personnel file. Excessive absences or tardiness will result in disciplinary action up to and including termination.

You may also want to institute a protocol for shift changes that requires the employee requesting the shift change to initial a written request, the employee agreeing to work the other employee's shift to initial the request, and the manager's initials approving the request. The policy should state that the original employee scheduled is responsible for the scheduled shift until these steps have been completed. Also, make sure that attendance and shift change policies are applied consistently to your entire workforce, as any disparities can lead to allegations of discrimination.

Dress Code. The requirement for a dress code will also vary by company and job within a company. Understanding that most restaurants require uniforms for at least front-of-the-house employees and that safety requirements may govern the uniforms and dress code of kitchen employees, the dress codes should be described in the handbook. The policy should clearly set forth requirements for those employees that are in contact with customers and will generally include standards for dress, hygiene and attitude. While the restaurant may provide at least part of the uniform, hygiene is of utmost importance. The policy should include a statement with respect to hair length or style and a statement that clothes should be clean and neat, that hands should be clean and fingernails cut and free of dirt. With respect to "back of the house" employees, the dress code should address issues relating to safety, such as not wearing loose-fitting clothes and wearing hairnets and nonskid shoes, at all times.

Safety and Accident Rules. Having a set safety policy is likewise especially important in the restaurant industry. Although the handbook will generally refer to other documents such as postings and extensive manuals committed entirely to safety, it is important to reference the safety policies in the handbook. The handbook should also reference additional resources and training that the company provides relating to safety. It is also a good idea to hold periodic training with respect to safety issues.

Anti-substance Abuse and Alcohol Service Policy. Drug or alcohol abuse can be a serious or even dangerous problem in any workplace. It is a good idea to clearly state your policy, requirements for testing and disciplinary action if you test employees, and any recovery or confidential employee assistance programs ("EAPs") that you provide.

Restaurants that serve alcohol (which includes almost all dine-in restaurants) also need to formulate and communicate a strict policy regarding service and consumption of alcohol on the premises. Although alcohol sales are an important source of revenue for many restaurants, liquor sales also create an increased potential for additional civil and criminal liability. It is therefore vitally important that employees know the laws and rules governing alcohol service and the consequences for failing to follow those rules and procedures. An effective alcohol service policy must set forth steps for monitoring customer consumption, i.e., procedures for ensuring that customers do not become intoxicated, and steps for handling an alcohol-related incident. Employees must also be instructed not to serve minors and, of course, be prohibited from consuming alcohol while working. If your restaurant allows employees to consume alcohol following shifts, then the rules governing post-shift consumption should be clearly set forth in the policy. For example, some restaurants require employees to leave the establishment following their shift, but allow them to return in street clothes if they wish to dine or consume alcohol. Other restaurants prohibit any employee from consuming alcohol at the restaurant at which the employee works, because there is too much potential for abuse. You should also regularly train employees on alcohol service protocol. Make sure employees have a clear understanding of the rules and consequences surrounding alcohol service, as an individual serving alcohol may also be criminally or civilly liable for alcohol-related accidents and violations.
start quote. . . An effective alcohol service policy must set forth steps for monitoring customer consumption, i.e., procedures for ensuring that customers do not become intoxicated, and steps for handling an alcohol-related incident.end quote
 

Non-harassment Policy. As recent litigation rates undoubtedly indicate, harassment, and specifically sexual harassment, is an important issue for restaurants and other employers. It is therefore important that an employee handbook include a statement that harassment is illegal and will not be tolerated by the employer, definitions and descriptions of conduct that is prohibited under the policy, disciplinary action that will be taken against harassers, a complaint procedure, assurance that all complaints will be confidential and will be promptly investigated, and assurance that there will be no retaliation against a person who files a complaint. Because an employee's knowledge of the policy and complaint procedures is so vital in the event that litigation does ensue, you should also have each employee sign a separate acknowledgement that he/she has read and understands the no-harassment policy and keep the acknowledgment in each employee's personnel file. It is one thing to have a no-harassment policy and another thing to enforce it. Accordingly, you should also make sure that managers and supervisors are aware of and trained in addressing complaints and conducting investigations.

Tip Reporting Policy. A large percentage of restaurant employees receive a good portion, if not a majority portion, of their wages in the form of gratuities or "tips." The wage and hour and tax implications that apply to tipped employees make it important to have a written policy governing reporting and treatment of tips received by employees. This policy should include an acknowledgment that the employee is required by the IRS to report all tips received from guests. The policy should further state that if the tips reported by all tipped employees in the restaurant do not equal a legally required percentage of total sales, the employer will allocate the difference between the tips reported and that percentage of sales as additional income to each employee who underreported tip income.

The tip reporting policy should also address the wage and hour implications of tipped employees. In particular, employees need to know that tips are included in the wages of the employee for purposes of calculating their minimum wage. If your restaurant has tip-pooling arrangements among employees, that should be included in the employee handbook as well. An employer needs to be very careful, however, regarding which employees are included in the tip pool to avoid a violation of the Fair Labor Standards Act.

Fraternization Policy. Employers should seriously consider including a policy prohibiting fraternization among supervisors and their subordinates. Supervisors and subordinates should be prohibited from engaging in a romantic relationship and any other type of personal relationship outside the restaurant, which may lead to a perception of favoritism. This policy is essential to preventing perceptions of favoritism and claims of harassment once a relationship between a supervisor and subordinate has ended.

In Addition...

While the foregoing constitutes the most important and industry-specific policies for restaurants, you should also include information about other employee benefits and work rules, including the following:

Use of Company Property. Although not as common in the restaurant industry, a policy about company property is something employers may want to include. To the extent that you provide uniforms that have to be returned at the end of employment, that can be included separately or as part of the dress code or uniform policy.

Group Insurance Benefits. Make a summary reference to your insurance benefits and eligibility. Then direct the employees to the details in a separate benefits handbook that may be provided by the insurance provider.

Short-term Disability. If you provide a short-term disability benefit, you will want to mention it in the employee handbook, but again, because the rules are complicated, refer to a more detailed document.

Continuation of Medical Care/COBRA. If you employ 20 or more persons, the law requires that you provide continuation of medical/healthcare benefits to employees that leave the company under most circumstances. This policy should be outlined in the employee handbook.

Workers' Compensation. Most states require employers to have workers' compensation insurance. Make sure that your employee handbook contains the proper notices as required by state law.

In addition, you should include other policies and benefits provided to employees including maternity leave, funeral leave, jury duty, military service, and tuition reimbursement policies.

Don't Go It Alone But Don't Give It Away

As noted above, because laws are constantly changing and some state-specific laws will affect the content of your employee handbook, you should always consult an employment attorney with knowledge of the restaurant industry before finalizing and disseminating your employee handbook.

Complex documentation, such as the employee handbook, is often the most daunting aspect of management, particularly if multiple pages of seemingly endless text cause your eyes to glaze. While you probably will want to lean on consultants, attorneys, and software for much of the legwork, don't be afraid to get involved in the process of developing an employee handbook, using some of the above-mentioned guidelines. You'll feel more in control of your business, and very likely pose those important common sense questions that will give you a better, final product.

-- Restaurant Startup & Growth





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