Employee handbooks: Best practices

Which policies should an employee handbook contain?

Employee handbooks must contain all relevant federal, state, local, and company-specific policies. Others — such as those governing harassment or discrimination — apply to all workplaces. Some policies, like remote work or patient care, may be more specific to certain companies. 

Handbooks should only include policies employers intend to follow. Failure to follow written policies can cause confusion, damage morale, and create legal liability. 

Federally mandated policies

The U.S. Department of Labor (DOL) administers and enforces more than 180 federal laws for about 150 million workers and 10 million workplaces. The most important DOL policies to include in your employee handbook are:

• Equal Employment Opportunity Commission (EEOC). EEOC policy requirements are some of the most essential regulations in an employee handbook. Elucidating these policies helps employers demonstrate their compliance with anti-discrimination laws, supports legal defenses against discrimination claims, and outlines complaint procedures for employees who believe they have been the subject of discrimination.
• Anti-discrimination, anti-harassment, and anti-retaliation. The policies related to these topics should clearly indicate that harassment, discrimination — on the basis of race, disability, religion, sex, and age — and retaliatory actions in the workplace are unacceptable. The policies must state how to report the alleged wrongdoing. Do not create restrictive reporting methods. For instance, employees should be allowed to submit their claims to the human resources (HR) department or any manager. These policies should also clearly state employees will not be punished for reporting alleged violations.
• Disability accommodation. It is vital that employees are aware of their right to accommodations and know how to request such accommodations. Within the policy details, remind employees that their request and the reason behind it will remain entirely confidential.
• Family and Medical Leave Act (FMLA). Under FMLA, employees can take up to 12 weeks of unpaid leave for “specific family and medical reasons.”  The Act contains many nuanced provisions. Providing your employees a link to the DOL’s FMLA website is advisable. Review the FMLA guidelines to determine if the Act applies to your employees.
• Employee benefits. These policies include Medicare and Social Security, various forms of mandated insurance, and workers’ compensation requirements.

Recommended company policies

Including company policies in an employee handbook helps establish employee expectations and protects your business from unlawful behavior and potential legal claims. The following policies are the most beneficial:

• Performance review. This policy lists the frequency of performance reviews, who conducts them and how, and what level of performance qualifies as meeting expectations. Telling employees how and when performance will be evaluated alerts them to the primary focus of their new positions.
• Social media. This policy sets forth whether employees can access social media on company devices, explains that its activity on company devices is not private, and delineates that this misuse can result in employee discipline. This is also a good place to explain the company’s intranet policy.
• Complaint procedures. Set forth the company’s formal grievance procedure, but always try to help employees feel comfortable raising their concerns informally before they file a complaint.
• Remote work. If the company permits remote or hybrid work, include detailed employee work expectations — including working hours — to minimize legal risk and decrease the likelihood of employees abusing a remote work arrangement.
• Workplace relationships. This policy regulates personal relationships between co-workers, manages the legal and practical risks often associated with these relationships, and must comply with state law.
• Payroll and compensation. Payroll policies delineate pay schedules, compensation structures, and incentives.
• Code of conduct. Each workplace is different, and employees want to know what behavior is acceptable. The code of conduct can cover interoffice behavior, dress code, safety guidelines, and other professional expectations. It can also delineate disciplinary actions taken for engaging in inappropriate employee behavior.
• Drug testing. The company’s legal department should always craft or review this policy since it must incorporate all federal and state-specific drug testing laws. It delineates when the company conducts drug testing and states the ramifications of a failed drug test.
• Safety measures. This section will include various policies as safety workplace requirements vary by job title. Overall, it should set forth the company’s safety objectives and how to best achieve them. 
• Employee benefits. These are the benefits a company offers in addition to federally required benefits. New employees may forget the benefits discussed when they signed their offer letter. The handbook is a convenient place to set forth health insurance options, retirement plans, and policies that govern perks like a company car, reimbursement procedures, professional development, charitable matching, childcare assistance, etc.

In addition to company policies, all handbooks should contain a training schedule. Delineating the company’s training topics and strategies tells new hires what they will learn and how it will be taught. It also demonstrates an employer’s commitment to supporting employees through continuing education.

Corporate policies and federal employment laws change over time. Employees must be notified each time the company updates or revises its handbook.

How often should an employee handbook be updated?

Employers must periodically review these employment manuals to ensure all policies are current and lawful and notify employees of each handbook update — templates make the revision process seamless. If an individual policy is revised, an employer may distribute or electronically circulate the updated policy; there’s no need to redistribute the entire handbook.

Some reasons to update a handbook include:

• New or amended federal, state, or local laws
• New company-specific policies
• Organization changes

A revised handbook should indicate that it supersedes the prior version. Whenever updates are made, retain electronic copies of the older versions for the longest statute of limitations period applicable under federal or state law. If an employer faces future litigation, it will need to point to the written policies in effect at the time of the challenged employment action.

Handbook format and distribution

Employers must select a format and method of distribution. Choose the options you think will best serve your employees.

Format. Employers must determine the most useful employee handbook format. Some employers create printed hard copies, while others prefer electronic versions. Online handbooks are easy to update and access. Keep in mind that offering multiple formats helps accommodate different learning styles. Always include an "acknowledgment of receipt" signature page.

Distribution. Onboarding orientation meetings are the perfect time to physically distribute a printed version of the employee handbooks or provide electronic access. Have an HR team member available when the company distributes handbooks so they can answer any questions that arise. 

Employers should adopt their own best practices related to maintaining and distributing their handbooks. 

Are the policies in an employee handbook enforceable?

The contents are enforceable if the handbook includes a specific policy expressing that enforceability. Employers must collect signed acknowledgment forms indicating each employee’s receipt, review, and understanding of the handbook’s contents. This practice reduces the risk of an employee using ignorance as an excuse for non-compliance. 

Final thoughts

The employee handbook is an invaluable resource for new hires and seasoned employees alike. Employees are often more comfortable consulting a corporate resource rather than approaching their manager directly. The more information a handbook contains, the more likely workers are to comply with company policies.

Notably, a thorough handbook can be one of an employer’s best defenses against employment claims. Covering your employment law bases, leaving little to chance or misinterpretation, reduces a company’s potential legal exposure.

For a comprehensive set of policies, please consult the Practical Law resources Employee Handbook Toolkit and State Employee Handbook Toolkit, two of more than 90,000 resources available on the platform. Try Practical Law for free today.