The Importance Of Nonprofit Employee Handbooks

The Importance Of Nonprofit Employee Handbooks

If you are starting up a nonprofit organization, you may be considering preparing a nonprofit employee handbook that communicates expectations for future workers. However, you may wonder if you really need a nonprofit employee handbook. Why an employee handbook is important and what to include in the employee handbook will vary by organization. If you are ready to discuss your organization’s unique needs and hear recommendations based on your situation, consider contacting a knowledgeable nonprofit lawyer from the Jennifer V. Abelaj Law Firm by calling 212-328-9568 to schedule a confidential consultation. 

What Is a Nonprofit? 

A nonprofit is an organization that exists for a social mission, not to earn a profit like a typical business. Most nonprofits are 501(c)(3) organizations, which refers to the portion of the United States Internal Revenue Code that provides for tax exemption for nonprofits that undertake specific social causes, according to the Internal Revenue Service (IRS). These causes can include research of a medical condition or protection of animals or children. 

What Is a Nonprofit Employee Handbook? 

Like employee handbooks for other companies, a nonprofit employee handbook communicates the expectations and policies of the workplace. The most significant difference is that the employees work for a nonprofit organization. Therefore, a greater need for confidentiality regarding the organization’s practices and donors may exist. An effective nonprofit employee handbook outlines the terms and conditions of employment and gives all workers a set of rules and a framework to follow. 

Why Are Nonprofit Employee Handbooks Important? 

Employee handbooks can help to protect a nonprofit organization from frivolous claims by helping the nonprofit set clear expectations for its employees. Employee handbooks list the established rules of the workplace to avoid confusion or ambiguity. Having a handbook for nonprofit employees also ensures that everyone is operating under the same set of rules and procedures. Additionally, employee handbooks may be necessary to obtain directors and officers liability (D&O) and employment practices liability insurances. 

What To Include in a Nonprofit Employee Handbook

Each nonprofit organization and workplace is different. Therefore, policies that are appropriate for one organization may not be appropriate for another. Different policies may need to be in place to account for the employee makeup of an organization or its mission. An experienced nonprofit lawyer from the Jennifer V. Abelaj Law Firm may be able to help determine your organization’s needs. Depending on the circumstances, a lawyer may recommend including some of the following policies and provisions.

At-Will Employment Statement

Many employee handbooks begin with a statement that the existence of an employee handbook does not create an employment contract. This is because many states, including New York, have found that such publications can create an impression that employees can only be dismissed for cause, according to the Nonprofit Risk Management Center. An at-will statement clarifies that the employment relationship is at will and can, therefore, be severed at any time by either the employee or the employer.

General Work Policies

General work policies may include information about the daily minutiae of working at the organization. These policies may be related to:

• Work hours
• Tardy and absence policies
• Policies for requesting time off
• Dress code
• Overtime policy
• Policies against workplace harassment and discrimination
• Discipline policy

Confidentiality Agreement 

Given the potential sensitivity of the information an organization may collect and store, a confidentiality agreement may be included in the employee handbook. This portion of the handbook can require employees to sign a statement agreeing that they will not disclose confidential information to anyone outside the organization or, in some cases, outside their department. 

Benefits

A nonprofit employee handbook may also include the benefits provided to employees along with eligibility information. Depending on the organization, benefits may include:

• Medical insurance
• Dental and vision insurance
• Disability insurance
• Life insurance
• Flex time
• Retirement benefits
• Paid time off (PTO), sick time, and vacation time
• Annuity plans
• Referral incentives

Communication Policy

Many people use their personal devices for work purposes. A nonprofit may choose to allow this but protect the business by requiring employees to agree to use their devices in a safe manner. This can include virus protection and protection from hacking. Alternatively, an organization may provide devices to the employees, which would come with those protections installed, to use solely for work purposes. 

Formal Performance Review Policy

An employee handbook may also describe the current roles for employees in the business and their job descriptions. Additionally, it can contain the procedure that will be used to formally review employees’ performance. This performance review may determine whether the employee remains employed with the company, is referred for remedial action, or receives a pay raise or promotion. 

A formal performance review may include a standardized form and framework to review all employees in a consistent process. Depending on the organization, the review may consist of analyzing the following information:

• The employee’s attendance
• How the employee is helping to achieve the nonprofit’s mission
• The employee’s ability to work well with others
• The quality of the employee’s work
• The employee’s ability to meet deadlines and goals
• The employee’s communication skills
• How much in donations the employee has brought into the organization, if applicable

Personnel Records

A nonprofit employer may be in possession of sensitive information about its employees, including their identifying information and protected health information. An employee handbook may include clear policies about how the organization protects this information. Generally, health information must be kept secured separately from other personnel records. Additionally, sensitive documents, such as wage garnishment or other court orders, generally should not be included in an employee’s personnel record.

Documents that a nonprofit organization may be keeping as part of its personnel records may include:

• Applications, resumes, and cover letters
• Signed forms stating that the employee received the employee handbook
• Payment information 
• Training and achievement records
• Records of time off requests and vacation leave

Contact a Nonprofit Lawyer for Help Today

If your nonprofit organization has or will have employees, knowing how to create a unique handbook is important. You will need to determine your organization’s unique needs and prepare a handbook that meets your nonprofit’s objectives. For answers to your questions about the importance of nonprofit employee handbooks, consider calling a knowledgeable nonprofit lawyer from the Jennifer V. Abelaj Law Firm at 212-328-9568 to schedule a confidential consultation today.