Human Resources professionals often advise companies about the importance of an employee handbook. But why are they so important?

Employee handbooks serve as a valuable communication resource for company-specific and legally-mandated policies. These policies inform employees of their rights, responsibilities, and benefits and cover a wide range of topics important to the workplace.

An employee handbook:

We strongly recommend developing a custom handbook for your company versus using an online template or “borrowing” a handbook from another company. Far too often we review the handbooks of small companies that have fewer than 50 employees and find that they obligate the company to Family Medical Leave and demographic reporting under the Equal Employment Opportunity Act. These are significant and burdensome obligations that do not apply to companies of their size. So why do they have them in their handbooks? Because they used a template or borrowed a handbook from another company. Don’t make that mistake. When it comes to legal compliance, tailor-made is always best.

Once developed, be sure to roll the handbook out to employees, train supervisors to properly enforce these policies, and enforce the policies consistently and fairly which means walking the fine line of treating everyone the same and looking at each situation on a case-by-case basis. Also, be sure to have your handbook reviewed and updated every 1 -2 years to remain in compliance with the latest laws and best practices.

A compliant employee handbook consists of required federal and state laws as well as certain local regulations your company is required to follow. If the company has employees working in multiple states – such as remote employees working out of their home or expanding into a new state – you need to make sure policies comply with laws in each state. This may involve revising policies to encompass all states’ regulations or creating a state-specific section or addendum if not offering the same benefits to all. When drafting a handbook, certain policies should be included if they apply to your company (list is not all-inclusive):

Company information: General information about the company and its way of doing business as well as how it complies with federal, state and local law

Expected conduct: What the company expects from the employee

Employee’s Rights: What the employee can expect from the company

Employee Benefits: Wide-ranging policies of company-designed and legally-required perks

Time off – Paid and unpaid time off employees are allowed to take and the specific requirements for eligibility, making requests, tracking, pay-in-lieu-of, and carryover (as determined by the company or by applicable law)

Time off usually dictated by the company but may be impacted in part by regulations:

Insurance benefits – Include general descriptions of offerings referring to summary plan description for details

Finally, while planning and developing your employee handbook, there are certain things to consider.

Include employment policies: Employee handbooks should contain policies that outline general expectations, responsibilities, guidelines, and benefits. Use language to incorporate most situations while allowing you to have options to determine action on a case-by-case basis (i.e., “Failure to follow may result in disciplinary action, up to and including termination”).

Do not include procedures: Procedure manuals should contain step-by-step instructions as to how to perform a task or handle a situation. For example, a discipline policy explains the general types of discipline while a discipline procedure will include what form to be used, how to complete that form, how and where to hold conversations, what to do if an employee reacts negatively, etc.

Include an acknowledgment form: Make sure the employee signs off on a document acknowledging:

File the original signed acknowledgement form in the employee’s file and give the employee a copy to keep.

Do not include other acknowledgment forms or agreements: Keep other agreements (such as arbitration, confidentiality, and non-solicitation agreements) out of the handbook. Instead, include general language regarding these areas of conduct expectations and possible repercussions in the handbook.

Include policies covering important conditions of employment: Employee handbooks should include the expectations of the company for the employee and vice versa. Company requirements usually include attendance, behavior, conduct, personal appearance, and safety. Employee expectations usually include pay procedures, time off, leaves of absence, and insurance benefits.

Do not include policies for and/or give to independent contractors: While certain policies may also apply to independent contractors (such as non-harassment / sexual harassment, non-discrimination, and non-retaliation), most policies are not applicable to contractors. Policies such as benefits, time off, work schedules, and time tracking are parameters that companies, by definition, cannot dictate for independent contractors.

Since an employee handbook is a legally binding document, it should be developed and/or reviewed by an HR professional or employment attorney. If you have had problems in the past such as an EEOC or harassment charge or decision, it is highly recommended to have it reviewed by legal counsel.