EMPLOYEE HANDBOOK GUIDELINES
WHAT IS AN EMPLOYEE HANDBOOK?
An employee handbook is a collection of workplace rules, policies, procedures, and other information that
an employer would like employees to know. It both records and communicates important company
information, setting guidelines for the employment relationship and for resolving conflicts in the workplace.
A handbook should answer many of the questions employees may have regarding such things as
disciplinary action and absence policies. It may also alleviate any anxiety employees may have about their
jobs because they will know where and to whom they can go for help.
In addition to being helpful to employees, a handbook can provide a measure of legal protection for the
employer because it is a piece of evidence that the employer has adopted fair and uniform policies and
WHO SHOULD HAVE ONE?
Even very small businesses with only a few employees can benefit from an employee handbook.
Remember, a handbook does not need to cover everything about the employment relationship. A small
business can make a short handbook easily with pre-made, customizable rules, policies, and procedures.
Businesses should take care, however, to make sure their handbooks comply with all applicable laws,
including state, county, and city laws. Your state’s legal department and/or a lawyer can help you in this
WHAT SHOULD BE IN IT?
A typical handbook begins with a short history of the business and the company’s mission
statement or philosophy. It should also state clearly that your handbook is a condensation of
employee rules, policies, and procedures, and that it does not cover every possible situation that
may arise. Also state that your business reserves the right to make changes to the handbook
without prior notice or employee consent.
Disclaimer Regarding At-Will Employment
Oftentimes, the language in an employee handbook may be construed to imply a contract of
employment. For example, you may refer to employees as “permanent employees,” and such
language implies that you may not terminate an employee under any circumstances. Or, you may
say or imply in your handbook that employees can keep their jobs as long as they perform at a
satisfactory level. Both these instances limit your ability to terminate your employees at will.
Employers should, therefore, put a disclaimer in the employee handbook. The disclaimer should
be put in a prominent place at the beginning and/or the end of the handbook, and it should be
written in clear language – not legalese – that employees can understand. Labeling the disclaimer
“Important” is also a good idea. In addition, you should have all of your employees sign an
acknowledgment that states the handbook is NOT a contract of employment and that the
employment relationship is at-will. See Freeworks.com’s Employee Handbook
Acknowledgment for such a sample form.
Simply putting prominent and clear disclaimers in your handbook and having all employees sign an
acknowledgment may not be enough to keep you free from legal trouble if your handbook contains
contradictory information – stated or implied – about an employee’s status. Make sure you read all
company documents (including your job application) carefully and eliminate any ambiguous and
Policies/Rule/Procedures to Include
Employee handbooks usually include the following:
Sexual harassment policy
Disciplinary action policy
A summary of benefits (vacations, leaves, health benefits, etc.)
A description of salary issues, including a statement on how pay is set and how promotions
and bonuses are determined. For many small businesses, this description can be a simple
statement that pay is set and changed by the president after s/he takes into consideration
the cost of living, company finances, and past performance.
A statement regarding normal working hours and overtime
Drugs and alcohol in the workplace policy
General work rules
General complaint policy and procedure
A code of conduct statement which explains that employees are expected to treat each
other with respect and honesty
Other things you could consider including are:
Physical examination policy
Drug test policy
FMLA (Family and Medical Leave Act) policy