Good Employees Handbook

Good Employee Handbooks, From A to Z


There is no fixed set of policies and procedures that employers include in employee handbooks. This is because every business has its own values, practices, and traditions. The following discussion is meant to address the more important inclusions, as an employee handbook should be as short as possible without missing any essential parts.


Alternative dispute resolution policy. A good employee handbook should include an alternative dispute resolution procedure, state that complaints will be kept confidential to the extent possible (e.g., information will be shared only on a ‘need to know’ basis), and assure employees that they will not be retaliated against for making good faith complaints pursuant to the policy. Employers should also inform employees regarding how to appeal any decision. Though arbitration is beyond the scope of this article, any arbitration policy must be separately agreed to by the employee.


Benefits available to eligible employees. Employee handbooks should include short descriptions of available benefits. They should also identify sources for further information, such as information regarding who is an eligible employee. Finally, they should state that the policy in the handbook is general and the terms of the benefit plan outline the rights of eligible employees.


Current practices and procedures. An employee handbook should reflect current practices and procedures, because policies set forth in employee handbooks can create contractual obligations or legal liabilities. Deviations from the policies in the handbook may have to be explained to a jury if the employee brings a civil action, so the employer should make sure such policies are followed.


Disclaimer. An employer should state in a disclaimer that with the exception of the at-will policy, if applicable, all other policies in the handbook can be modified by the employer at any time without a written revision of the handbook. Yet courts will generally be receptive to employee arguments that they are not bound by changes to a policy if they did not receive any notice of the change, so employers should provide timely notice of any new or modified policies.


Employment relationship. Many employers have their employees acknowledge their employment status – for example, at-will – by signing a receipt when the employer gives them a copy of the employee handbook. The employer can later use this receipt to support its understanding of the employment relationship (e.g., to argue that the employment relationship was at-will). The employer can also use this receipt to limit the legal effect of the handbook.


FEHA requirements. FEHA requires that employers train supervisory employees in California regarding sexual harassment every two years and within six months of promotion, if the entity regularly employs at least 50 employees or contractors.


Grooming standards. Reasonable requirements concerning employee dress and grooming are lawful, but courts have found some such policies to have a discriminatory effect. For example, requiring women to wear sexually provocative uniforms might be discriminatory, depending on the nature of the business. Employers also must allow employees to appear or dress consistently with their gender identity.


Harassment procedure. A harassment procedure in an employee handbook serves two functions. It outlines the process for handling sexual harassment and discrimination complaints, and provides an assurance to employees that they will not face retaliation for good faith complaints under the policy. This portion of the handbook should also include the information discussed in California Government Code § 12950(b), and expressly prohibit all forms of offensive or degrading behavior in the workplace, regardless of whether it is sufficiently severe or pervasive to constitute unlawful harassment.


Introductory statement. An introductory statement should inform employees that the employee handbook supersedes any previous written or unwritten policies or procedures.


Job abandonment provision. Employers should inform employees regarding when they will be deemed to have abandoned their jobs. For example, an employer may state that subject to federal and state law, the employer will consider employees to have voluntarily terminated their employment if they fail to report to work or report absence for three consecutive days.


Kin (or employment or relatives) policy. Employers may want to state in employment handbooks that relatives of current employees will not be hired or transferred into positions in which they would supervise, be supervised by, work with, or have access to sensitive information regarding a close family member.


Leave policies, paid and unpaid. Promises regarding leave made in employment handbooks may be enforceable under state contract law (e.g., on a promissory estoppel theory), so employers should make sure the stated policies are both lawful and consistently followed. If an employer has eligible employees and has written policies concerning employee benefits or leave rights (e.g., in its handbook), the employer must include information about California Family Rights Act rights and obligations. The same goes for the Family and Medical Leave Act, and the handbook should describe the employer’s policy on fitness-for-duty reports. Finally, if an employer publishes a handbook that describes temporary disability leaves or transfers available to employees, it must include a description of pregnancy disability leave or transfer.


Memberships. If the employer pays membership dues for employees, the process by which such dues are paid should be explained in the handbook. For example, some law firms pay Bar dues for all regular, full-time attorneys employed with the firm.


Notice-posting. Employers engaged in certain regulated activities that could involve hazards, use of specialized equipment, or exposure to hazardous substances must provide safety instructions to employees. This means information regarding the potential hazard and safety precautions applicable to the employees’ work. Moreover, all employers should affirm their commitment to safety and inform employees that they will post all notices required by law.


Pay policies. A good employee handbook describes different employee classifications (e.g., exempt and non-exempt employees), the definition of a workweek and workday, pay periods, timekeeping, overtime, meal and rest periods, bonuses, commissions, or travel pay, and expense reimbursements and payroll deductions. The handbook should state that non-exempt employees must record all their time and should not work overtime without express prior approval from a supervisor. (Though this in itself will not relieve the employer of the obligation to pay for overtime, it is still a good idea for inclusion in the handbook.)


Quit (or resignation) procedure. Employers might request that employees who plan to resign provide a certain amount of notice. Additionally, employers may outline procedures for the return of company property upon an employee’s resignation.


Receipt. The acknowledgement of receipt of the handbook is discussed above under “employment relationship.” It should be drafted as a contract, in which the employee agrees to the employment relationship and how the terms and conditions of employment can be modified. For example, the employer may draft the receipt such that the terms and conditions of employment can only be modified by a writing signed by the employee and a designated company officer.


Standards of performance, discipline, and termination. The handbook should make explicit any standards regarding whom employees should report to when they will be absent or late, and the consequences of failure to comply with such standards.


Table of contents. A table of contents and/or index will make the information in an employee handbook easier for employees to locate.


Unemployment compensation entitlement. Employers should inform employees that unemployment insurance provides benefits for persons unemployed through no fault of their own. As a result, employees will generally be eligible to receive benefits only if they are laid off due to lack of work, terminated for reasons other than work-related misconduct, or if they quit for reasons amounting to good cause under the law (and after taking reasonable steps to solve the problem).


Violence prevention. Employers are committed to workplaces free of violence, so they should consider defining “workplace violence” in the handbook and outlining procedures for employees to report such violence. This should include the person whom employees should contact with any concerns. Employers should also assure employees that all reports will be investigated, no retaliation will occur, and corrective action will be imposed for potentially violent or threatening activities.


Workers’ compensation claims. Employers should notify employees that workers’ compensation in California is a no-fault system designed to compensate employees who are injured on the job. Thus, injured workers should notify the employer of any injury within 30 days of it occurring. Employers should also encourage employees to report any health and safety hazard, or accident or injury, to a supervisor or other appropriate company official as soon as possible.


X. The signature, or a mark serving as the signature (e.g., ‘X’), should appear on the acknowledgement of receipt after the employee has had a chance to review his or her copy of the handbook.


Year and date. Each page of a good employee handbook should be dated.


Zero-tolerance policy. Employers may prohibit the use or possession of drugs and alcohol, and being under the influence of drugs or alcohol, on work premises. But employers should explain that the legal use of prescribed drugs in a safe manner, as instructed, is permitted as long as it does not impair the employee’s ability to perform the essential functions of the job. In addition, employers must not discriminate against alcoholics or recovering drug addicts, so employers should offer reasonable accommodations for such individuals.


In conclusion, employers should draft employee handbooks carefully, and consider retaining attorneys as consultants on their handbooks or employment practices more generally.