The Employer's Guide to Employee Handbooks

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Why Do Companies Have Employee Handbooks?

Quite simply, employee handbooks are a guide to help a company and its employees understand policies, how policies are applied, and how these policies are enforced.

After all, employees can’t adhere to policies that they don’t know exist, which severely limits any human resources (HR) action that can be taken when employees don’t follow policy guidelines.

Employee Handbook Content

An employee handbook outlines the company's mission and values while clearly communicating and setting expectations. It clearly explains company policies while covering federal and state labor laws, outlines management responsibilities, and gives instruction on where employees turn for help. An employee handbook also showcases the benefits your company offers to employees and how they are both attained and taken advantage of. 

Both full and part-time employees should always receive a copy of the employee handbook, but it's important to be clear if a policy or benefit only applies to certain types of employees such as who gets paid time off, sick pay, and holiday pay. Be specific about these policies and minimize any legal jargon that can lose your audience. 

Also keep in mind that independent contractors or volunteers are not considered employees and should not be provided with your employee handbook. 

The following breakdown will help you understand what content needs to be inside your employee handbook:

The Employee Handbook Welcome Message

Your welcome message is the window into your company for employees, typically during the employee onboarding process, so... 

Welcome employees with the best message possible! 

Give background and information about the company and its mission. This will help employees understand the culture they’re expected to become a part of. Start setting expectations here by explaining your core values and how these values create the ideal work environment and employee experience for the team.

At-Will Employment Statement 

This section of your handbook is a protection for the company that describe the at-will working relationship. An at-will working relationship means there is no employment contract signed and either party can terminate the relationship at any time, for any reason.

For employers, if an employee termination happens, a record of any policies an employee broke, and the resulting company action, should be tracked in the employee record. If any legal issues arise, this can serve as proof of labor law compliance.

Equal Employment Opportunity (EEO) 

The U.S. Equal Employment Opportunity Commission (EEOC) enforces EEO compliance for all employers. This is a full list of protected classes.

Federally Protected Classes:

  • Race
  • Color
  • National origin
  • Age
  • Sex
  • Sexual orientation
  • Religion
  • Gender identity
  • Disability
  • Military or veteran status
  • Genetic information
  • Child or spousal support withholding

Classes Protected By Certain State Laws:

  • Lawful off-duty conduct
  • Political affiliation
  • Marital status
  • Familial status
  • Credit report
  • Credit information
  • Arrest record
  • Domestic violence
  • Victim status

Exempt and Non-Exempt Employee Classification

Misclassification of employees can be a legal trap for employers. Under the Fair Labor Standards Act (FLSA), determining the employee status is a formal way of classifying employees into two basic types: exempt (i.e. a salaried employee) versus non-salary (i.e. an hourly employee). 

Only certain employees can be counted as exempt. Generally, exempt employees are salary employees whose position passes specific tests established by the FLSA and applicable state laws. They are exempt from overtime pay requirements. Entry-level and manual laborers should not be exempt.

A non-exempt position does not pass specific tests or the employer chooses to pay hourly. Non-exempt employees must be paid overtime. Unless notified by management in writing, all employees are non-exempt.

Employee Conduct

This primarily covers what bad behavior looks like and how to remedy the behavior. This typically includes:

  • General conduct guidelines
  • Sexual and other unlawful harassment
  • Complaint procedure
  • Corrective action


It is important to cover how, when, and in what cases employees will be paid. This section should include:

  • Pay period frequency
  • Paid time off 
  • Sick leave(s) 
  • Disability leave(s)
  • Bereavement leave
  • Health insurance
  • COBRA 

The paid time off section will include how paid time off is accrued; if it is by pay period, monthly, or a lump sum. 

Health and Safety

Health and safety rules is a very important section and should include the following:

  • No smoking
  • No drugs or alcohol
  • Workers' compensation
  • Accident reporting
  • Working place violence
  • Driving safety
  • Office closures

Workplace Guidelines

This section serves as an effective catch-all for any information that is relevant but didn’t fit into a particular category. Some examples would be:

  • Off-the-clock work
  • Meal and rest periods
  • Lactation accommodations
  • Attendance and tardiness
  • Personal appearance and hygiene
  • Social media
  • Parking (if applicable)


This section provides information for when an employee is laid-off or quits. This would include requesting two week notice when resigning from duty and any personal and company property that must be returned.

Be sure to collect the handbook from employees. If they take it home and spend time on it you will be responsible to pay them for that time. Instead, be sure you offer time during work hours. Have an acknowledgment page for employees to sign as proof they agree and understand all company policies. File the acknowledgment page in their personnel file. 

Reviewing and Updating Employee Handbooks

Once everything is wrapped up, be sure to proofread, check the formatting, and have a table of contents. Locate hard copies of the handbook in a central location.

Generally, you want to have an introduction in the handbook that lets employees know that you can change the policy at any time. In this same section be sure to state that the at-will provision can not be changed. Adopt a review schedule, that is at a minimum annually, to apply any new laws or changes.

Most new laws become effective either in January or July. There are some areas with recent changes that you should keep an eye on such as NLRB rulings, additions to protected classes, and marijuana use both recreationally and medically. Be sure to update the handbook with any new policies that are being implemented. 

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