Corporate Law

How an Employee Handbook Will Help a Business

Employee Handbook Provides Guidance

Businesses communicate with their employees in many ways, some formal, some not-so-formal. An employee handbook is a formal means for communicating with employees. Despite its formality, it can also be quite effective if done well. 

An employee handbook provides a guide to the employer’s policies, procedures, and expectations. As a guide it is a quick and effective way to convey these policies to employees in one, easy-to find place. The handbook is also a tool for the employer to demonstrate to its employees that it is applying a consistent set of policies and procedures in the workplace.   

Many employers think of employee handbooks as a list of rules. An effective employee handbook does include rules and regulations for the business, but it should do more. It should also establish the baseline culture for employees, by explaining how the employee policies are derived from the important values, strategies, and purpose of the business. 

An employee handbook can achieve the following:

  • Outline management and leadership expectations of employees
  • Explain benefits
  • Communicate consistent, non-discriminatory policies to everyone at the same time
  • Demonstrate compliance with the law
  • Identify where employees can go for help or more information
  • Introduce employees to the culture and values of the business

Building an Employee Handbook

No business is the same, and no employee handbook will be the same either. Many policies will be consistent across businesses. However, the uniqueness of each business will be revealed in the policies that are included or excluded and in the different versions of each policy. For example, every business will have policies related to time off work, but a business that is a law firm will likely provide paid time off for jury or witness duty. A business that sells baby clothes will likely have extensive family leave policies, a university handbook may discuss sabbaticals for professors, and a seasonal business may limit the time off that is allowed to be taken in-season. Every business will address situations when employees are sick, but a hospital will address them more extensively than a construction contractor.

When building out the handbook, a business should seek input from lower-level supervisors, or even select non-supervisory employees, to ensure that the handbook addresses the issues that are encountered most frequently. 

Most employee handbooks will include the following:

  • Non-discrimination and inclusiveness policies
  • At-will employment disclaimer
  • Attendance and leave policies: Family and Medical Leave Act leave, bereavement leave, voting leave, Paid Time Off, sick leave, vacation, sabbatical, etc.
  • Work performance and discipline
  • Employee health and safety: emergency procedures, medical services, Personal Protective Equipment, Occupational Safety and Health Act requirements, workers compensation, substance abuse, communicable disease policies, etc.
  • Benefits: health insurance, short- and long-term disability policies, life insurance, retirement and savings plans, etc.
  • Wage and hour issues: pay periods, direct deposit, clock in and clock out procedure, meal and rest period, etc.
  • Employee Code of Conduct: nondisclosure of confidential information, use of company computers and equipment, employee privacy, competition issues, etc.
  • Arbitration policy
  • A section for employees to acknowledge having received the handbook

Using the employee handbook to introduce employees to a business’s values and mission can help to integrate new employees into the team and familiarize them with the culture of the company. This puts everyone on the same page and can make the success of the company a team goal. To accomplish this, the following items should be also included in the handbook:

  • The purpose and basic strategies of the company
  • Communication etiquette
  • Common goals
  • The company and team values

Many supervisors are not skilled in conveying the company’s purpose and values. It is easier for such supervisors to refer to the complete and accurate statement of these values in the employee handbook. Pointing out and discussing the company’s values early on also encourages new employees who are not a good fit to decide to leave voluntarily.

What Not to Include in the Employee Handbook

While writing an employee handbook, it is important to consider the rules of the National Labor Relations Act (NLRA) and its enforcement agency the National Labor Relations Board (NLRB). Several of these rules are not intuitive. Some policies that businesses may consider including in their handbooks may actually be illegal.

For example, employers should not include the following policies in their employee handbooks:

  • At-Will employment disclaimers that are stated too broadly: Including a disclaimer that the employee and employer have an at-will relationship, and that the handbook is not a contract, are both good practices. Neither are against the law. However, the NLRB does take issue with statements to the effect that at-will employment relationships can never be amended, modified, or altered, because union negotiations can alter at-will relationships. Thus, including these statements in the disclaimer implies that the employees can not engage in union activity.
  • Requiring confidentiality of terms and conditions of employment: Protecting a business’s confidential and proprietary information is a legitimate goal for employers. Having policies that prohibit non-confidential discussions of certain topics, such as business strategies, is permitted under the NRLA. However, having policies that do not allow employees to discuss among themselves the terms and conditions of their employment is an issue. For example, some businesses prohibit the discussion of wages and bonuses among employees to avoid the toxic work environment that might result when one or more employees are jealous of other employees. Prohibiting discussions such as these, however, limits the ability of employees to talk about how to obtain better wages. Therefore, policies banning these discussions are illegal. To satisfy the NLRB, the confidentiality provisions in employee handbooks should be limited to company financial or proprietary information and trade secrets, Internet and electronic security, and personally identifying information of employees and customers.
  • Confidentiality provisions that prevent whistleblowers: Employee handbooks should include policies against the disclosure of the trade secrets of the employer. However, would-be whistleblowers are not prohibited from disclosing trade secrets to their attorneys or to government officials charged with the responsibility for investigating violations of the law.
  • Non-disparagement policies: Often employee handbooks include policies that do not allow employees to disparage or “bad mouth” their employer in person or online. The NLRB has found, however, that employees have the right to disparage their employers’ workplace conditions. Such provisions may be included if they are more limited in scope. For example, the NLRB generally allows civility rules that prevent employees from disparaging other employees.
  • Prohibitions of political speech: As the nation is becoming more divided politically, some employers are seeking to curb political speech in the workplace.  Generally speaking, private sector employers are free to impose such policies, but government employers are not. However, there are two main restrictions on such policies. First, the policy cannot prevent employees from discussing the terms and conditions of their employment. Second, employees also have the right to talk about possible unlawful conduct in the workplace. For example, under various federal laws, employees may complain about harassment, discrimination, workplace safety violations, and other issues, and these issues often have political undertones. Finally, employers who do not enforce such rules evenly across the political spectrum tend to anger employees who feel discriminated against.
  • Required random drug testing: Each state has different laws pertaining to drug testing and the procedures that employers follow when deciding to drug test employees. Each state also has different rules on what the employer can do if a drug test comes back positive. Some states prohibit random drug testing and require employers to specify a valid reason for each drug test.
  • Overbroad arbitration agreements: Agreements that require arbitration in cases of a dispute between the employer and employee are allowed under the NLRA. However, the NLRB does require that arbitration agreements not interfere with employees’ rights to file charges with, and have access to, NLRB processes and procedures.
  • Requirements for providing a doctor’s note for every day of sick leave (if not consistently enforced): Some employers require employees who take sick leave to provide a doctor’s note. Such a rule is permitted under the law.  For longer leaves, such as under the FMLA, requiring doctor’s notes is a best practice for employers. However, if an employer has a rule requiring a doctor’s note every time an employee is off due to sickness, and then only enforces the policy against employees who are poor performers, then the employer opens itself up to a charge of discrimination.

After the Handbook is Written

Once the employee handbook is written, the employer should distribute it to employees and keep a record that every employee received a copy.

Following the policies and procedures laid out in the handbook is also critical. Not following policies can create significant confusion or lead to charges of discrimination. It is also advisable for employers to review the handbook at least once every year to make sure that all policies are still active and relevant. 


Gottschlich & Portune, LLP is now the law firm of Foos & Lentz. We look forward to working with you regarding your legal needs.