Build a Stronger Team: How an Employee Handbook Elevates Your Workplace

Our firm helps its business clients develop and revise employee handbooks. A business that doesn’t have an employee handbook is missing the opportunity to protect itself from litigation while giving employees a resource to help them meet their employer’s expectations.  

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What Is an Employee Handbook?

Employee handbooks collect the policies and procedures that businesses want their employees to understand. Some policies, such as those involving compensation and benefits, affect employees directly. Others describe the employer’s standards that govern the conduct of employees. An employee handbook should also provide information about the business’ culture and philosophy to give employees an overview of their role in helping the business thrive.

An employee handbook differs from an operations manual that explains how the business works. An operations manual typically outlines procedures that managers should follow to assure that each part of the business carries out its functions efficiently and effectively. While an operations manual is often a “how to” guide for managers, an employee handbook more broadly addresses standards that all employees are expected to meet.

Because employee handbooks address the general conduct of all employees, they do not typically include information that is relevant only to a subset of employees. Position descriptions and lists of job duties, for example, are important documents for guiding job performance, but since they depend upon the particular position an employee holds, they are often generated as separate documents, not as part of an employee handbook.

Work rules and safety procedures may or may not be part of an employee handbook. Rules that apply generally to all employees, such as a prohibition against theft or sexual harassment, will generally be included in an employee handbook, while rules and procedures that only apply to managers or employees in discrete departments might be issued to the covered employees as separate documents.

Why Does My Business Need an Employee Handbook?

If you don’t have employees, you don’t need an employee handbook. A business that relies on employees to get the work done, however, will find an employee handbook to be beneficial in several ways.

First, employee handbooks communicate important information to employees that is collected in a single publication. An employer might explain its employment policies to its employees at hiring, but the employees might not recall that information accurately when they need it.

Second, sitting down with each new hire and spending time explaining each employment policy requires a major investment of time. It is more efficient to communicate those policies in a handbook.

Third, placing employment policies in writing assures employees that they will be treated the same way as other employees who hold similar positions. Uniformity in the treatment of employees is a safeguard against liability for discrimination claims.

Fourth, providing employees with anti-harassment policies and a procedure for reporting workplace harassment provides legal protection to employers from claims of racial or sexual harassment. While a policy cannot insulate an employer from liability if it permits or encourages a culture of sexual harassment in the workplace, courts view reporting procedures as a potential shield against liability when an employer creates the procedure in good faith and an employee fails to follow it before bringing a claim.

Fifth, handbooks help employees manage their expectations. For example, a handbook may tell employees how long they should expect a probationary period to last and explain the reasons why that period might be extended. Handbooks help employees avoid unpleasant surprises and encourage them to focus on achieving performance standards that will help them make progress in their careers.

Sixth, handbooks assure employees that the business complies with federal, state, and local employment laws. Providing information that facilitates compliance with employment laws helps assure that the employer’s managers and subordinate employees are on the same page. Employees are more likely to feel valued when they believe their employer is committed to treating them fairly.

What Should an Employee Handbook Contain?

Employee handbooks should be tailored to the specific needs of a business. There are nonetheless certain kinds of information that most employee handbooks should contain. For example, the handbook should make clear that its terms do not constitute contractual promises and do not create job protections for at-will employees. 

Topics that are common to many employee handbooks include:

Culture. A handbook typically acquaints new employees with the story of the business they have joined. The handbook might explain the history of the business, acquaint employees with its significant achievements, and offer reasons for employees to take pride in their work. A handbook often stresses the need for teamwork and cooperation and the importance of maintaining standards of excellence.

‍Compensation and benefits. Handbooks usually designate the employer’s payroll period and payday and explain the employee’s options (such as direct deposit) for being paid. Handbooks explain policies governing paid time off, including sick leave and vacation pay, as well as holiday pay and unpaid leaves of absence. Handbooks may explain the different benefits that are available to full-time, part-time, and temporary employees, such as parking spots and the use of a company car. Handbooks often provide a brief description of available retirement and insurance benefits while directing employees to more extensive documents, including summary plan descriptions, that describe benefits more fully.

FMLA, ADA, and USERRA procedures. A business that is covered by the Family and Medical Leave Act or an equivalent state law should describe the leave benefits that are available to employees, the circumstances under which they are entitled to claim those benefits, and the procedure to follow to seek a job-protected leave. Procedural information should also be provided for employees who want to request an accommodation of a disability under the Americans with Disabilities Act or who need to take a job-protected leave to fulfill an active military duty requirement pursuant to the Uniformed Services Employment and Reemployment Rights Act. 

‍Probationary periods. If employees are expected to complete a probationary period successfully before they become eligible for certain benefits, the handbook typically explains the length of the probationary period, circumstances under which it might be extended, and how completion of the probationary period affects eligibility for benefits.

Disciplinary procedures. Some employers institute a system of progressive discipline that begins with informal counseling, progresses to warning warnings, and culminates with suspensions or termination of employment. Employers that opt for a system of progressive discipline will typically retain the right to depart from the system in order to discharge employees when warranted by the severity of the employee’s conduct or the employee’s attitude.

Work environment. All businesses have a legal responsibility to prohibit discrimination and harassment based on race, color, national origin, gender, sexual identity, religion, and disability, among other protected classifications. To maximize an employer’s protection from liability for violating employment laws, a handbook should include an equal opportunity statement and strong anti-discrimination and anti-harassment policies. The handbook should also identify clear procedures for reporting harassment, including multiple persons who are authorized to receive complaints so that employees are not required to report harassment to the employee about whom they are complaining. The handbook should also discuss the degree to which such reports can be kept confidential and the procedure the business will follow to investigate improper conduct and to correct it when reports are substantiated.

Work rules. While some work rules (particularly those that address safety procedures) might be unique to specific positions, rules that apply to all employees should be addressed in an employee handbook. In addition to requiring employees to refrain from workplace violence and harassment, work rules should address theft of physical property, misappropriation of intellectual property, confidentiality and data protection, employee appearance and uniforms, tardiness, conflicts of interest, solicitation, outside employment, timeclock management, drug use, workplace injury procedures, and general guidelines to assure a safe working environment for all employees.

Remote work. Not all businesses offer opportunities for remote work. A handbook should either explain that remote work is unavailable or should explain the circumstances under which it might be offered and the procedures that employees who work remotely must follow.

Employment termination. While an employer cannot require an at-will employee to give notice before quitting, employers may explain that advance notice will streamline payment of final wages and give the employer time to find a replacement employee. Severance pay (when available) is typically addressed in employment contracts rather than a handbook, but the procedure for collecting a final paycheck is commonly described in a handbook, as are the obligations of a worker who is separated from employment, such as returning company property.

Receipt and acknowledgement. Employee handbooks should usually be accompanied by a receipt and acknowledgement. The receipt serves as proof that the employee received the handbook and understands its importance. The receipt should typically include an acknowledgement of the employee’s at-will status and his understanding that the handbook creates no contractual promises.

Should You Follow a Template to Draft Your Own Handbook?

Several human resources websites offer templates for employment handbooks. Since each business is unique, no single template will cover the needs of every employer. The legal perils that affect one industry might not threaten another. An employment lawyer is in the best position to help a business decide upon the unique content of its employment handbook.

Employment attorneys have often devised their own templates, but they serve only as a starting point for handbooks that are finely tuned to the needs of a particular business. A lawyer can help businesses understand which policies and procedures they should memorialize in an employee handbook and how they should be worded.

In addition, employers need to make and update choices about the benefits they offer and the policies they follow. Choices that are informed by legal advice offer the best protection against time-consuming and expensive lawsuits. Lawyers help businesses explain their policies and benefits in clear language that will avoid employee confusion.

How Often Should I Update My Employee Handbook?

Employment laws change regularly. State and federal legislatures amend employment statutes or enact new ones almost every year. Court decisions change the interpretation of employment laws at unpredictable intervals. Those changes might make the content of an employee handbook outdated.

As a general rule, a business should ask its employment lawyer to review its employee handbook every year. Changes in the law might prompt revisions of the handbook. A business might want to make the changes during a month when demands on managers and human resources personnel are not hectic, but should usually undertake that task at roughly the same time each year.

A business might also ask its employment lawyer to notify it of significant changes in employment law that could affect its policies and procedures, including those that it memorialized in an employee handbook. The attorney might suggest revising the employee handbook immediately to reflect an important change in the law. Less significant changes might be saved for the annual review to avoid the expense of printing new handbooks repeatedly throughout the year.

Disclaimer: This blog is for informational purposes only and does not constitute legal advice. For personalized guidance, please consult with a qualified attorney.

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