Do Companies Need Employee Handbooks? | Kendall PC
By: KendallPC
December 22, 2021

Is an Employee Handbook Necessary?

Although businesses are not required to create or distribute employee handbooks, companies should not overlook them. Several laws require employers to inform their workers of certain rights and entitlements. An employee handbook is an effective way to provide legally required information to workers, such as employment benefits and policies related to workplace harassment. It’s also far more efficient than burdening employees with disorganized stacks of mandatory paperwork.

Whether your company needs help drafting formation and compliance documents or assistance with negotiations and deal-making, the business formation, startup, and corporate governance attorneys at Kendall PC are ready to help. Our experienced team is committed to helping founders, entrepreneurs, startups and emerging growth companies support business objectives and protect their interests. 

Why Are Employee Handbooks Important for Your Busines?

As an employer in today’s business landscape, you have numerous responsibilities. Writing, reviewing, and maintaining an employee handbook may feel like a low priority when you’re running or building a business. However, a strong employee handbook is an essential tool for a company’s employees and leaders alike. An employee handbook can:

Protect Your Company from Liability

If your business is threatened with a lawsuit or a claim from an employee, your company’s employee handbook could protect it from liability. A comprehensive employee handbook will demonstrate that your company values its employees and abides by state and federal labor laws.

When your employees receive their handbooks, have them sign acknowledgment pages. This establishes their understanding and willingness to follow company policies.

Explain Employee Programs and Benefits

When you fully articulate the benefits you provide to your employees, it demonstrates how much you appreciate their hard work and dedication. This has the potential to significantly increase the satisfaction and retention of your company’s employees.

Employee handbooks should detail the eligibility requirements and policies for all company benefits, such as health insurance, paid leave, vacation time, and retirement plans. You should also describe any employee programs you provide, such as reporting programs or workplace assistance.

Ensure Your Policies Are Clear and Consistently Enforced

You cannot expect employees to understand or follow company policies if they are not explained clearly. Employers must thoroughly outline company policies and expectations regarding workplace conduct, employment, and compensation when creating an employee handbook.

Remember that these handbooks also apply to leadership. Clear policies will assist supervisors, managers, and executives in fairly and consistently enforcing these policies across all departments and groups.

Let Your Employees Know What to Expect

Good employee handbooks should inform workers what is expected of them and what they can expect from the company. This includes aspects such as timekeeping responsibilities, safety expectations, and what employees should do if they require assistance with a task.

You can help your employees avoid potential uncertainty, conflict, and discouragement by providing this information clearly from the start.

Outline Your Values and Company Goals

When a new employee joins your company, one of their first and most important impressions of the company’s culture and values is provided by the employee handbook. It can provide answers to frequently asked questions about how your company operates, your long-term goals, and your stated mission.

Employees who understand how they fit into an organization and what they’re aiming for are more likely to feel like true team members.

What Should an Employee Handbook Include?

There is no one-size-fits-all employee handbook. Provisions will differ in accordance with the company’s size, business type, and location. A business startup, formation, and corporate governance attorney can help a company develop a handbook that reflects the unique aspects of the business and ensures compliance with applicable laws. Generally, an employee handbook should explain a company’s general provisions, prohibited conduct, and benefits. These aspects are detailed below.

General Provisions

There are several common provisions that should be included in an employee handbook:

  • Company overview: An employee handbook’s introduction should describe the company’s history and share its mission statement. This informs employees about the company’s core values, goals, and expectations.
  • Attendance/work hours: Employees should know about scheduled hours, break periods, overtime, and timekeeping policies. Employers should also inform workers about the policies and consequences that apply to unexcused absences and other time violations in the handbook.
  • Pay: Employee handbooks should explain when and how workers are paid. This information should include options for receiving pay and state bonus and raise policies.
  • Safety: In addition to state and federal laws, companies are often subject to rules set forth by the Occupational Safety and Health Act (OSHA). An employee handbook should detail applicable safety rules as well as procedures for reporting dangerous conditions and workplace accidents.
  • Disclaimers: Make sure that employee handbooks include explicit disclaimers that the employee’s employment is at-will, and the handbook does not create an employment contract. This means that either party can terminate the employment at any time for any reason.
  • Termination and discipline: A company’s procedures and policies regarding termination and discipline should be included in the handbook. Conduct that is prohibited and may result in termination or discipline should be described. However, employers should also reserve the right to terminate or discipline employees for reasons not detailed in the handbook.
  • Use of company technology: Establish policies regarding the use of company phones, computers, and email for personal reasons while on company time. Detail the policies regarding the issuance of company devices such as laptops and cellphones.

Prohibited Conduct

Prohibited conduct, and the policies regarding that conduct, should be clearly defined in the employee handbook. Prohibited conduct can involve:

  • Discrimination: State and federal laws prohibit workplace discrimination based on religion, race, age, sex, disability, and other protected statuses. An employee handbook should explain what is considered discrimination and outline the company’s policies related to such claims.
  • Harassment: A handbook should include the company’s written policy on sexual harassment prevention. In addition, sexual harassment prevention training should be provided for workers.
  • Alcohol/drug abuse: The company’s policies regarding drug and alcohol testing should be included in the employee handbook, as well as the disciplinary measures that are involved.

Benefits

The company’s employment benefits should be outlined in the employee handbook. This could include information regarding time-off policies, pension/402k, and health insurance. Time-off policies may include family leave, holidays, sick time, vacation days, and other permissible leave time. The handbook should specify how time is accrued, when time off is paid or unpaid, and what happens to unused time.

Contact Our Business Startup, Formation, and Corporate Governance Attorneys Today

An employee handbook is important for any company. However, handbooks must be drafted correctly and maintained regularly to be effective. Kendall PC can help your business at every stage of development, including the creation of vital documents such as an employee handbook that complies with applicable laws and helps those at your organization understand their rights and obligations.

To learn more about our business startup, formation, and corporate governance services, contact Kendall PC today online or at (484) 414-4093. We proudly serve small, midsize, and emerging businesses throughout the United States and across the globe.