Why does your CA say this? Episode 2

What does the CA say?

Maintain Employee handbook right from the early stage.

Is Employee handbook really important?

One of the best practice that is normally ignored in startups and small entities is to have an Employee Handbook. This manual contains information like:

  • Reimbursement/expense procedure
  • Travel policy
  • Work etiquette
  • Email etiquette
  • Outlines key legal issues
  • Employee leave entitlements and benefits

Generally, these ventures are bootstrapped entities formed by friends and families, similarly, the initial funding is from the same parties. Owners of these ventures think that the venture is an extension of the family even though there are employees from different backgrounds. Such attitude restrains them from taking policies easy.

How does Employee handbook benefit the firm?

  • During External Funding scenario, this document is one of the mandatory requirements for funding due diligence, the reason being employee liability is pretty high.
  • Reiterates the at-will status of employment
  • Minimizes time spent answering general questions that can be easily addressed in the employee handbook
  • Clearly defines and communicates policies applicable to all employees, which promotes a sense of fairness, if enforced uniformly
  • Identifies key performance expectations
  • Facilitates discipline by providing a document that management and HR personnel can point to when a policy has been violated
  • Outlines employer and employee rights and responsibilities.
  • Promotes consistent treatment throughout the company, which may reduce employee lawsuits.

How is Employee handbook drafted?

An employee handbook can be drafted by a CA, HR personnel, pretty much by the founders too. When drafting the employee handbook care should be taken because one should consider which laws and policies are necessary for the business based on size, geography, and other relevant factors. Due to continuing changes in the employment laws, it is highly recommended that organizations have the employee handbook reviewed by legal counsel. A typical Employee Handbook should consist the following clauses:

  • A welcome statement along with a brief history of the company and a summary of the company’s mission.
  • At-will status of employment
  • Contract disclaimer and right to revise
  • Equal employment opportunity statement.
  • Policy against unlawful harassment
  • Commitment to provide reasonable accommodations, where available, and to engage in the interactive process.
  • Other policies depending on the entity size.

Wazzeer Professional Network is built on qualified CAs, CSs, and Lawyers who work with startups in understanding and delivering various compliance works seamlessly. We would be happy to work with you getting this organized and compliant. Let’s connect -> “Get your Wazzeer”

Leave a Reply

Notify of