An employee handbook establishes workplace policies, communicates expectations, and protects employers from liability. While not legally required in most situations, handbooks serve critical functions for businesses of all sizes. Understanding essential policies helps employers create effective handbooks that reduce legal risk.
Why Have an Employee Handbook?
Employee handbooks provide several benefits. They communicate expectations and policies consistently to all employees. They demonstrate compliance with legal requirements. They establish procedures that protect against liability. They provide documentation if disputes arise.
Without written policies, employers face inconsistent application and difficulty defending employment decisions.
Legally Required Notices
Federal and state laws require employers to provide certain written notices. Including these in your handbook ensures compliance. Required notices typically include Family and Medical Leave Act (FMLA) rights (for employers with 50+ employees), Equal Employment Opportunity policies, workplace safety information, workers' compensation information, and state-specific required notices.
State requirements vary significantly—research your state's mandates.
Essential Policies
At-will employment statement: Clarify that employment is at-will (where applicable) and the handbook doesn't create a contract. This preserves employer flexibility.
Anti-discrimination and harassment: Detail prohibited conduct, complaint procedures, and investigation processes. Include sexual harassment policies and reporting mechanisms.
Leave policies: Explain vacation, sick leave, FMLA, and other leave types. Clarify accrual, usage, and what happens to unused leave.
Work hours and pay: Describe pay periods, overtime policies, timekeeping requirements, and pay practices.
Anti-Harassment Policies
Effective anti-harassment policies include a clear definition of prohibited harassment, examples of unacceptable conduct, multiple channels for reporting complaints, assurance against retaliation, explanation of investigation procedures, and statement of potential consequences.
Having and following a good harassment policy provides employer defenses in harassment lawsuits.
Technology and Social Media Policies
Modern handbooks need technology policies covering company email and internet use expectations, personal device policies (BYOD), social media guidelines, confidentiality of electronic information, and monitoring practices.
Balance business needs with employee privacy rights. Be clear about monitoring so employees have no expectation of privacy on company systems.
Discipline and Termination
Describe your discipline process while preserving flexibility. Avoid language that creates implied contracts or eliminates at-will status. Many employers use progressive discipline as a guideline while reserving the right to skip steps for serious violations.
List conduct that may result in discipline, but state the list isn't exhaustive.
Confidentiality and Trade Secrets
Include policies protecting confidential business information. Handbook acknowledgment of confidentiality obligations supports trade secret protection. Reference separate confidentiality agreements if applicable.
Drug and Alcohol Policies
Establish clear policies on workplace substance use. If you conduct drug testing, explain when and how testing occurs. Consider state law limitations on testing and marijuana policies, which vary significantly.
Acknowledgment and Disclaimers
Include an acknowledgment form for employees to sign confirming they received the handbook, understand policies can change, the handbook doesn't create a contract, and employment remains at-will.
Have employees sign the acknowledgment and keep it in their personnel files.
Regular Updates
Laws change, and handbooks must keep pace. Review and update your handbook annually. Distribute updates to all employees and obtain new acknowledgments. Outdated policies can create liability.
Getting Legal Help
Employment attorneys can draft or review handbooks to ensure legal compliance and protection. They understand current requirements, common pitfalls, and language that creates unintended obligations. Investing in a proper handbook prevents costly litigation.