Lesson Last Updated: August 31, 2023

Lesson Highlights

Typically, employers create an employee handbook to ensure compliance with applicable laws, explain their workplace policies and procedures, and minimize the risk of legal claims. Ideally, every employer has this tool in their belt.

In this lesson, we'll cover:

• The employee handbook as an organizational tool;
• The employee handbook as a legal tool; and
• The employee handbook as a cultural tool.
  

The Handbook as an Organizational Tool

 An employee handbook assembles all of the company’s policies and procedures, and conveniently provides a centralized way to stay organized. At the same time, it informs employees about the terms and conditions of their employment in one place.

Your employees are agreeing to abide by the policies in your handbook, but it's important to remember that if you, the employer, are making promises to your employees or creating procedures within the handbook, you need to abide by those promises also.

Because of this, it's imperative that you read (and reread, periodically) your employee handbook to ensure that you understand everything included! Even if a policy can be amended, this is usually prospective only and any promises that you've made that would be applicable to a current employee situation should be honored.

Managers also use the handbook to learn about applicable laws and answer employee questions. A handbook is essentially a “guidebook” for them, and can help ensure that managers treat employees consistently and fairly. Your managers should be trained on all policies and should be instructed to enforce the policies as laid out in the handbook.

If a manager is ever unclear on what something in the handbook means, they should be encouraged to speak to whoever they report to for clarification as soon as possible; never shame a managerial employee for "not having all the answers."

The Handbook as a Legal Tool

Employee handbooks also guide the employer on how to legally deal with difficult employee situations. Employment laws are laid out in a complex framework of federal, state, and local laws (which is why larger corporations devote an entire human resources department to deal with employment law compliance.) But let’s face it—you’re running a business here, you simply do not have the time to research, understand, and implement policies reflecting new changes in the law. That's what your lawyer is for!

Employee handbooks should be carefully crafted. Downloading a handbook from a faceless stranger on the internet is sometimes worse than having no employee handbook. Some policies should have higher amounts of detail than others.

For example, the State of California requires certain details to be reflected in a harassment-prevention policy, and thus, that policy should be sufficiently detailed; however, you might want to leave flexibility in your policies around disability accommodations, as the law requires an interactive process with each employee individually (meaning there is no one-size-fits-all option here).

Employee handbooks, while often helpful for the employer, have also been used in litigation by an employee to show how an employer deviated from its articulated policy, or how an employer enforced an outdated policy. This is why it is crucial to consistently revise your handbook to ensure it complies with the always-evolving local, state, and federal employment laws.

Any time your lawyer suggests an employee handbook update, you should try to budget for this. Usually a handbook is due for an update at least once per year, and usually at the end/beginning of a year when new legal changes most often take effect. If you typically have an HR professional make small updates to your employee handbook in real-time, you should still have an attorney review. We have personally seen many handbooks with outdated law that an HR professional did not know had been overturned, so it's a good idea to have a second set of eyes on this document.

The Handbook as a Cultural Tool

To be a strong cultural tool, an effective handbook goes beyond just policies and procedures. It perpetuates an authentic workplace culture through writing style, layout, and graphics. It’s more than the content; it’s also the look and feel. It’s an authentic reflection of your values and should excite and inspire your employees about their work.

This lesson includes a downloadable checklist of items that you should think about including in your employee handbook to help create strong workplace culture!