I recently participated on a panel for women business owners and one of the questions posed to the panelists was “Why do you do what you do?” One of the panelists responded with an answer that really struck me. She said, “I believe that business ownership gives me the greatest opportunity to have an economic impact – I get to provide jobs and impact lives.” Being an employer brings such satisfaction and pride in being able to impact people’s lives and with it, an incredible responsibility. As a business owner, you must balance the needs of the business against the needs of employees. This balance requires a careful evaluation of the risk, cost, and benefit. Employer policies are the result of this evaluation.
Many think that employer policies are “standard” and can be implemented as “boilerplate.” But this is wrong. The business must tailor the policies to address the key risks and make sense for both the business and employees. If the policies skew too much for the benefit of the employer, employees will not want to work there. If the policies skew too much for the employees without good reason, the policies don’t help the business mitigate risk. Each company has different needs based on its industry and workforce. A company that has employees operating heavy machinery may have different policies than those whose employees with significant intellectual property. The important factor is to ensure the policies make sense for the business and mitigate the risks the business faces in its employment relationships.
Once the right policies are determined, they must be clearly and consistently implemented; otherwise, they do not address the risks they are intended to mitigate. For example, if a policy is implemented but not regularly applied, the company has created more risk for itself. We have seen numerous companies that have found themselves in a difficult and costly situation because they did not apply a policy equally to all employees.
Policies must also be updated regularly as the workforce, company, and regulations change over time. When a company hires a new class of employee, it may adjust its compensation or bonus structure. When the company launches a new business line, it may hire different types of employees with different risks and needs. And when new legislation is passed, the company must determine whether it affects the company’s current policies.
Business owners have the unique role of impacting people’s lives by providing jobs. This is a great gift and challenge. However, proactively managing the risk by implementing appropriate and practical policies that protect the business and set expectations will increase the reward of being an employer.
Some key policy areas for consideration:
– Leave Policies including vacation, sick, military, family leave, jury duty, bereavement, etc. and whether these are paid time and/or paid out at termination
– Compensation Policies including payroll periods, withholding, and timesheets
– Expense Policies including limitations on expenditures and receipt and reimbursement policies
– Intellectual Property Policies
– Social Media Policies including use of personal and business social media accounts
– Technology Policies including the download of software and personal use of company provided technology
– Termination Policies including notice requirements, final paycheck, and return of property
– Controlled Substances Policies including the use of medication, drugs and alcohol
– Restrictive Covenants including non-compete, non-solicitation, non-interference and confidentiality provisions