Eight Items to Watch for in Your Employee Handbook

Employers are required to provide employees with notice of their rights as employees. For small businesses, the familiar break room posters may be all that’s needed. Once a business grows beyond a few employees at one workplace, however, an employee handbook may be in order.

Since an employee handbook may appear in court, it is important to understand that a handbook can be an employer’s best defense. If all employees have read and signed the same handbook and that handbook accurately reflects the company’s actual policies, the handbook can help defeat claims that “unofficial” policies existed, let alone that they were in violation of the law. Alternatively, a handbook with out-of-date or badly worded policies can get an employer in trouble in court. For example, even seemingly innocuous general statements about at-will employment or disparaging comments in social media may be found to violate the rights of employees to discuss dangerous working conditions or unionization. To be an effective defense in court, an employee handbook must be up-to-date, and it must reflect the real policies of the employer.

A court does not expect an employee handbook to be a law library, however. Typically, handbooks refer to outside resources such as state and federal fact sheets and guides. This way, changes in the law do not create a requirement for the handbook to be changed as well. With these ideas in mind, here are some key areas to consider when creating or updating an employee handbook.

One: Hours, pay, and attendance policies

The basics may come first: when employees are expected to be at work, when they may leave, how much time they have for meals and breaks, when time sheets are due, when and how pay is distributed, jury duty policy, and a list of observed holidays, for example. Since an employee manual cannot cover every contingency, it is best to keep it as simple and practical as possible and cover the unknowns with a general statement about checking with one’s supervisor or HR representative when there is a question. The handbook may say that the company complies with such laws as Fair Labor Standards Act (FLSA) and applicable state and local laws regarding wages, hours, overtime, and recordkeeping.

Two: Leave policies

Most employers voluntarily provide employers with some type of paid or unpaid leave. Employers should include written versions of these policies in their employee handbook. Common leave policies include vacation leave, sick leave, personal leave, bereavement leave, and leaves of absence. These policies should explain how much leave employees receive, when it may be used, how it must be requested, and other important elements of the policies.

In addition to voluntarily-provided leave, there are federal laws as well as laws in several states that require employers to provide family, medical, sick, and/or parental leave. For example, when applicable, the Family and Medical Leave Act (FMLA) provides employees with up to twelve weeks of unpaid leave per year, during which time the employees’ employer-sponsored healthcare benefits must be maintained. The FMLA allows leave for the birth and care of a child, for adoption, for care of an immediate family member’s serious health condition, or for the care of an employee’s serious health condition. The employee handbook should specifically mention the FMLA, similar state family, medical, sick, and parental leave laws (if any), and their applicability to employees.

Three: Disability and reasonable accommodation policy

Under the Americans with Disabilities Act (ADA), it is unlawful for an employer to discriminate against a qualified employee or applicant who has a disability. Many states have laws that provide employment protections for disabled employees as well, such as the California Fair Employment and Housing Act (FEHA). The employee handbook should specifically mention employees’ ADA and state law disability discrimination protections.

The ADA and similar state laws also require employers to make reasonable accommodations for disabled employees and applicants. These may include modifying workplace settings, furniture, and devices, allowing for reduced hours, and providing other aids to allow the disabled employee to perform their job. The handbook may describe how disabled employees may ask for an accommodation.

Four: Workers’ compensation policy

As with the FMLA and ADA, the employee handbook should specifically reference applicable workers’ compensation laws that provide benefits to employees who are injured on the job. The handbook may also state that employees are required to report injuries that occur on the job as soon as possible and the applicable penalties for workers’ compensation fraud.

Five: Harassment, discrimination, and retaliation policy

This is another area that an employee handbook should not be without. This section should state that the employer complies, and expects employees to comply, with federal and state laws against discrimination and harassment as well as retaliation for reporting them. It should specifically address sexual harassment. The company policy for reporting harassment and discrimination should explain how employees can file discrimination and harassment complaints, as well as how to make a second report if original complaints are not addressed, and how they will be addressed in a clear, general statement (in California, discrimination and harassment policies must contain specific information–see 2 CCR 11023).

Courts have ruled that laws against discrimination apply broadly, including to categories that may not be specifically mentioned. For this reason, if the handbook makes a list, it should say that no employee is to be harassed or discriminated against on any basis protected by law, including age, disability, national origin, pregnancy, race/ethnicity, sex, or religion.

Six: Substance use policy

The employee handbook should include a substance use policy that prohibits employees from using drugs and alcohol while working. It should also prohibit employees from working while impaired due to drug, including prescription and over-the-counter drugs, and alcohol use to help reduce workplace accidents and injuries.

If employers maintain drug-free workplace policies or similar drug testing policies, they should include them in their handbook and ensure they are compliant with state drug-free workplace and testing laws.. Samples of drug-free workplace policies may be found online.

Seven: Code of conduct

In recent years, the lines between work and home have become blurred. Thanks to camera phones and social media, it is now common to hear about employees who lose their job after engaging in some type of unacceptable behavior, whether at work or not. For this reason, an employee handbook’s language regarding unprofessional behavior that unfairly damages an employer’s reputation should not be overly specific.

On the other hand, it is illegal for employers to restrict the rights of employees to discuss working conditions, wages, and unionization. A code of conduct section should not be so broad as to prevent such discussion. For example, employees should not be required to keep communications “positive at all times.”

If employees use computers and employer-provided phones, the code of conduct should also make clear what types of use are acceptable and what are not. Items to consider are data use, copying, security, personal use of computers, and access to websites not related to work. Some forms of computer use, such as accessing pornography at work, are clearly unacceptable and should not be permitted. However, it may not be realistic to forbid all non-work-related computer activity and the policy should be written to reflect this fact.

Eight: The summary and acknowledgment page

Finally, the last page of many employee handbooks contains a statement that the employee is required to read and sign. This statement often includes disclaimers, for example, that the handbook does not constitute an employment contract, that their employment is at-will, and that the handbook may be changed.


While employee handbooks are not required by law, they can protect employers and give employees an understanding of what an employer expects of them. Handbooks can list and briefly describe the laws that apply to the employment relationship. As such, handbooks will require updating from time to time and should address the laws that employers are required to tell employees about. Finally, to be effective, the handbook should match the reality of the workplace.

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