Does My Small Business Need an Employee Handbook?

Employee handbook, pen, glasses and calculator on desk.

Businesses are not required to have an employee handbook. But an employee handbook or company policy manual can provide many legal and non-legal benefits and help a company avoid costly and time-consuming lawsuits.

What Is an Employee Handbook?

A company policy manual is an informational guide that notifies employees of an employer’s internal policies and procedures, employment benefits, and workplace expectations. The employee handbook can also provide information about the company’s mission, values, and culture.

A well-written employee manual should address an employer’s policies about attendance, paid time off, the workplace code of conduct and progressive disciplinary policy, as well as expectations about an employee’s appearance. It should also provide employees with information on what to do if they have a grievance and how to contact the employer’s Human Resources Department.

The handbook is beneficial to employees and employers alike. It advises employees about workplace expectations and how they can comply with the employer’s expectations and internal policies.

A company can use the handbook to ensure the business’s policies and procedures are clearly communicated to the employees, which can protect an employer against many employment-related legal disputes.

What Should an Employee Handbook Include?

The handbook should reflect the values of your company and clearly describe its internal policies and procedures. When done properly, a well-written employee handbook will save your business time and money by streamlining operations and avoiding many employment-related issues.

While the handbook should be customized to your workplace, there are common elements it should contain, including that nothing in the employee handbook creates a contract, that the handbook can be changed at any time at the employer’s sole discretion, and that at-will employees remain at-will employees and can be discharged at any time for any non-discriminatory reason.

The employee handbook should also include a section where the employee acknowledges receipt of the handbook and that they have read and understood it.

Do Small Businesses Need an Employee Handbook?

Many small business owners wonder whether they need an employee guidebook. A well-written employee handbook can protect any company, regardless of size.

State and federal laws affect all businesses, and an employee handbook is an effective way to communicate expectations and employment policies and procedures, ensure employees comply with state and federal laws, and avoid employment-related conflicts.

An Employee Handbook Protects Against Legal Exposure

In addition to outlining employment expectations and internal policies and procedures, an employee handbook can protect your business against legal exposure. Even though the employee handbook may not be legally binding, it can help avoid many common legal issues by explaining the company’s expectations.

Protect Against Discrimination Claims

Many employment discrimination claims are based on a disparate treatment theory. When alleging disparate treatment, an employee claims they were discriminated against because they were treated differently than a similarly-situated colleague.

An employee handbook can protect a business against claims of employment discrimination. The handbook should include information about the company’s policy against workplace discrimination, including claims of sexual harassment, racial discrimination, gender discrimination, and discrimination based on sexual orientation. It should also include information on what an employee should do if they believe they are the victim of workplace discrimination and direct employees to promptly report concerns of harassment through the appropriate channels.

An employee handbook should advise supervisors that they are required to immediately pass along complaints of discrimination and that they are prohibited from retaliating against an employee who complains of workplace discrimination.

A well-written employee handbook should make clear that the company does not tolerate harassment or discrimination. This will help support a legal defense if the company is ever targeted in a claim of workplace discrimination.

Protect Against Claims of Wage and Hour Violations

An employee manual should be used to identify prohibited conduct and tell employees not to engage in behavior that could result in legal exposure for the company. In addition to anti-discrimination language, an employee handbook should contain information about overtime pay and clock-in and clock-out policies and procedures. Sections like these can protect a business against claims of wage-and-hour violations.

How Can My Small Business Get an Employee Handbook?

An employee handbook is a valuable tool for businesses of any size. Even if your company already has an employee handbook, it should be periodically reviewed and revised to reflect changes in the law and workplace culture.

To start creating or revising your company’s policy manual, contact the employment lawyers at RKPT today.

Attorneys: Jarrod M. Mohler