Employee Handbooks – An Overview


No law requires any employer to use an employee handbook. However, it behooves every employer to create some kind of employee handbook. The pros greatly outweigh the cons as to why an employer should use an employee handbook. You should also eventually have an attorney review your employee handbook for compliance with federal, state, and local laws.

In general, an employee handbook will lay the groundwork of your company in written words to clarify potential misconceptions. An employee handbook acts like a giant FAQs page. By putting your company’s policies into written words, you’ll help to alleviate potential problems that could otherwise occur.

In this article, we’ll go over the purpose, contents, and main policies to include within your employee handbook.

Next, let’s take a look at the purpose of employee handbooks and why they are so valuable.

The Purpose of an Employee Handbook

An employee handbook sets the blueprint for your company. It lays out all the various policies and procedures of your company. However, just creating an employee handbook is only half the battle. You must also enforce the policies and procedures in your employee handbook fairly and efficiently. If you don’t, a court could determine that your employee handbook is not worth the paper that it is printed on.

Employee handbooks can vary drastically in size, style, and content and employers can freely choose what they want to include in their employee handbooks. However, most employee handbooks will include a set of standard policies and procedures to comply with law and avoid common areas of dispute.

An employee handbook should also be annually reviewed and updated. Employee handbooks should include an effective date, i.e. the date in which the employee handbook went into effect. When an employee handbook is updated, the effective date must also be updated and every employee will need to review and sign the updated employee handbook. This is why it is better to update employee handbooks annually or semi-annually, or when a drastically new law affects your company. Sometimes, rather than updating the whole handbook, a simple sheet of paper with a new policy may be used. It will all depend on the situation and how the employer wants to proceed.

Next, we’ll explore the basic contents to include in most employee handbooks.

Contents of an Employee Handbook

Every employee handbook should contain certain components. Federal, state, and local laws will also apply to your employee handbook. So, make sure to understand the laws when drafting your employee handbook.

With these ideas in mind every employee handbook should contain some or all of the following contents:
  • Title page (with effective date)
  • Table of contents – with page numbers
  • Body (this is the "meat and potatoes" of the employee handbook, which we’ll go over in more detail on the next page):
    • General information about the company/Mission Statement
    • At-will Employee Statement
    • Hiring Rules
    • Anti-Harassment & Anti-Discrimination clauses
    • Compensation Structure for Employees
    • Hours of Operation
    • Leave
    • Performance Reviews
    • Benefits
    • Health & Safety Policy
    • Anti-Violence Policy
    • Privacy in the Workplace
    • Workplace Conduct
    • Disciplinary Policy
  • Index
  • Acknowledgement Page – page for each employee to sign in acknowledgment of the employee handbook
This only gives some of the basic policies implemented by employers. There are many different types of policies to choose from and each employee handbook must be tailored to each company’s operations. Also, as companies grow and change, so must their employee handbooks.

Next, we’ll go over the above-listed contents contained in an employee handbook in more detail.

Main Policies of an Employee Handbook

Every employee handbook should contain some fundamental policies. Some of these policies include:
  • General Information About the Company/Mission Statement
    • This is generally the first substantive information in an employee handbook. It explains the purpose of the employee handbook.
    • Mission statement – tactfully craft the purpose of the company, perhaps with a history, organizational chart, etc.
    • State this is an employee handbook and that it does not supersede any federal, state, or local laws.
  • At-will Employee Statement
    • An "at-will" statement means that an employees may be terminated for no reason or any reason, i.e. the employer does not need "just cause" to terminate the employee (Please read "At-Will Employment – An Overview" for further details).
  • Hiring Rules
    • Discuss any hiring probationary periods.
    • Discuss how the company hires new employees, including any affirmative action plans.
    • State the company’s equal opportunity employment policies, e.g. hire without regard to race, disability, age, religion, etc.
  • Anti-Harassment & Anti-Discrimination clauses
    • Discuss how the company promotes and enforces an environment free from harassment and discrimination in compliance with federal, state, and local laws.
  • Compensation Structure for Employees
    • This must be hand-crafted for each company.
    • Discuss and overtime, bonuses, commissions, pay advances, raises, or other compensation structures.
  • Hours of Operation
    • Discuss any flex-time, break time, lunch time, etc.
  • Leave
    • Discuss the various types of leave, including:
      • Sick leave
      • Medical leave, e.g. under the Family Medical Leave Act
      • Vacation leave
      • Civic leave, e.g. jury duty
      • Bereavement leave
  • Performance Reviews
    • Discuss how, when, and why performance reviews will be conducted. This will set an evaluation framework for employees to know what is expected from them.
  • Benefits
    • Discuss any of the benefits that your company may offer, including:
      • Life insurance
      • Dental insurance
      • Vision insurance
      • Medical insurance
      • Pensions
      • 401(k) plans
      • Profit sharing plans
      • Fringe benefits, e.g. phones, cars, travel reimbursement, etc.
  • Health & Safety Policy
    • Discuss the workplace rules for the particular health concerns in your business.
  • E.g. food industry – importance of cleanliness and washing your hands
  • E.g. construction industry – proper equipment and gear that must be used and/or worn in certain situations
  • Anti-Violence Policy
    • Many employers choose to implement a "Zero-Tolerance" for violence in the workplace. If so, make sure to discuss this and enforce it in your workplace.
    • Example of Zero-Tolerance policy for threats in the workplace:
      • "Any threats or insubordination can be grounds for immediate discipline up to and including termination."
  • Privacy in the Workplace
    • Your company may want to monitor certain situations in the workplace.
    • However, please read "Privacy in the Workplace" for further details to make sure that you comply with federal and state laws before doing so. Otherwise, you could face some stiff penalties for violations of your employees’ privacy.
  • Workplace Conduct
    • Your company could discuss what employees can and cannot wear and/or bring to work.
    • E.g. Employees may not bring animals into the workplace
  • Disciplinary Policy
    • Many employers choose to implement a progressive disciplinary policy.
    • A progressive disciplinary policy may follow the following format:
      • First warning – oral;
      • Second warning – write-up;
      • Third warning – written reprimand;
      • Fourth warning – written reprimand and suspension without pay; and
      • Fifth warning – termination
    • Employers can also designate certain acts as grounds for immediate termination or use a "point system," where certain acts are grounds for a ½ point or full point, and after a certain number of points the employee receives progressive discipline.
      • This is an area that the employer will want to spend some time on because discipline will inevitably have to be dealt with in the workplace. An employee handbook will often act as a company’s first line of defense to enforce its disciplinary policies
      • If an employer does not have a disciplinary policy, an employee may be more likely to argue that he or she was discriminated against, i.e., that the company disciplined one employee differently than another employee for the same or similar acts.
Next, we’ll wrap up this article by re-emphasizing some main points.


In this article, we covered the purpose, contents, and main policies to consider with employee handbooks. Overall, remember that an employee handbook acts like a giant FAQs page. It also acts as an employer’s guide to enforce its policies.

So, once you create an employee handbook make sure to enforce it – otherwise a court may determine that your company’s policies are worth the paper they are written on. You should now have a better understanding about the importance of employee handbooks in the workplace.

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