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The Employee Handbook: Don’t Overlook This Important Tool

An employee handbook is an important tool for all employers, large or small. An employee handbook serves to communicate important information such as the history and mission of the company and the policies, procedures, and benefits of employment. A properly written handbook can define the expectations of the employer and (provided the company follows to established policies) help protect the company against complaints of unfair and/or inconsistent treatment and discrimination.

As the year comes to an end, it is a perfect time for employers to take the plunge and draft a handbook (or dust it off and revamp the old version) to help set expectations for the new year. What are the essential elements of a handbook? A properly drafted employee handbook should:

  • Contain a contract disclaimer. A handbook serves as a guideline only and should not be construed as creating a contract or guarantee regarding any particular policy or benefit. A handbook should include a disclaimer making clear that it does not create a contract and that the employer maintains the right to modify or discontinue any policy without prior notice.
  • State the at-will doctrine. A handbook should clearly state that employees are at-will and that nothing in the handbook alters this relationship. In other words, it makes clear to employees that the handbook does not create an employment contract for a definite term or require cause or any particular process or procedure for termination. It is helpful to put this statement in the introduction as well as the acknowledgment form.
  • General employment information. A handbook should include an overview of the company’s history and mission. It should also include general employment policies covering employment eligibility (background check policy, authorization to work in U.S., etc.), code of conduct, dress code, hours of operation.
  • Work schedules. A handbook should describe the company’s policies regarding work hours and schedules, attendance, punctuality and reporting absences, along with guidelines for flexible schedules and telecommuting, if applicable.
  • Compensation and overtime policy. A handbook should state when and/or how often employers are paid, raises, bonus eligibility, and any deductions. It should also state that employees will receive overtime pay for hours worked in excess of 40 hours per week. If overtime must be approved by a supervisor, this should be clearly stated.
  • Performance evaluations. A handbook should set forth the performance evaluation process so that employees understand not only how often evaluations occur but how they will be evaluated.
  • Employee benefits. A handbook should include an explanation of any benefit programs and eligibility requirements. This can include health insurance, life insurance, and any retirement plans. It is important to provide a general overview and make clear that benefits can be changed at the employer’s discretion.
  • Leave policies. A handbook should include an overview of an employer’s leave policies. Depending on a company’s size, this could include federal family medical leave and military leave. Even if a company is not large enough to fall under federal leave requirements, it may be subject to state leave requirements. In addition, a company should explain its other leave policies, including paid time off, holiday, bereavement, and sick leave.
  • Anti-discrimination policies. Employers must comply with state and federal equal employment opportunity laws which prohibit discrimination and harassment. A handbook should include a section about these laws, the expectation that all employees comply with these laws, and the reporting and investigation requirements. Importantly, the policy should make clear that retaliation for reporting discrimination or harassment is strictly prohibited.
  • Disciplinary actions and terminations. A handbook should include a provision relating to disciplinary action. An employer should not make any promises or guaranties; instead, the company should retain as much discretion as possible.
  • Computers and technology. A handbook should outline policies for appropriate computer and software use. If personal use is prohibited, this should be made clear. Additionally, it should be made clear that employees do not have an expectation of privacy with respect to company computers and devices and that the company has the right to access all company computers and messaging equipment.
  • Acknowledgment form. At the end of the handbook, there should be an acknowledgment form stating that the employee has reviewed, understands, and acknowledges receipt of the handbook. Again, this should include an “at-will” statement and a contract disclaimer.

There are a number of topics that can be included in an employee handbook. However, the topics discussed above provide a helpful start in what can be a daunting process. Additionally, creating or updating a handbook is only the first step; following the policies and procedures in the handbook is essential.