Should you maintain an Employee Handbook?

Practice Areas

By: Nishita Patel

While there is no law requiring employers to maintain an employee handbook, a well drafted employee handbook can play an important role in reducing potential liability with respect to claims brought by current and former employees and the regulatory agencies.  No employer is too small to use an employee handbook.  A typical employee handbook will include policies that comply with applicable law, demonstrates an employer’s commitment to comply with the law and accurately reflect the employer’s actual practices and provides the managers a framework to consistently handle employment issues.

Reasons for having an employee handbook:

  • An employee handbook provides an employee information about the employer and set forth expectation.
  • Grouping various employment policies together in an employee handbook makes it easier for an employer to ensure that each employee receives copies of all relevant policies.
  • An employee handbook provides an employee with understanding of their rights and responsibilities.
  • An employee handbook is a centralized place for employees to look for answers to common questions such as how often employees are paid, request time off from work, complain about operational matters, work place violence, use of electronic resources, comply with law, etc.
  • In case of a termination, if an employee challenges the basis of his or her termination, the employee handbook can be used to justify the termination
  • Employee handbooks and signed acknowledgments can assist in an employer’s legal defense.

Depending on the size and the location of employer’s business and its employees, different employment laws (federal, state and local laws) may apply and govern aspects of the employer-employee relationship. For the employers with strong, centralized legal and human resources functions, it is recommended to have an employee handbook that is compliant with federal law and addendum for each state where the employer has employees.  This allows an employer to keep uniformity in basic policies. Many employers maintain their employee handbook on its intranet, to achieve administrative ease and uniformity in managing their workforce.

A poorly drafted or outdated employee handbook may create liability for the employer.  As such it is advisable that the employee handbook use flexible language and proper disclaimers. Also, in view of the changes in circumstances and laws, the employee handbook should be regularly reviewed and updated for better protection of your company.