Question:

I have been advised to put together an employee handbook. I have been in business for a number of years now without one, but recently have grown to 10 employees. One of the reasons I have held off putting together a handbook is that I wanted to maintain flexibility with regard to my business’ policies. Am I legally required to have a handbook? If I do decide to have a handbook, what are some of the basic policies that it should contain?

Answer:

Although there is no law that requires employers to have employee handbooks or personnel manuals, they can be an important tool for communicating essential information to employees about your company’s policies, the performance standards, and benefits. By having written policies in place, an employer is also able to develop uniform standards within the workplace that can help promote fairness and the consistent treatment of its employees. Handbooks are therefore very useful to employers in terms of complying with their legal obligations to their employees.

An employer that does not have written guidelines in place is much more likely to encounter problems arising from ignorance of its policies, inconsistent or unfair application of those policies, conflicting policies, and resulting confusion among its employees. This can lead to internal problems such as employee dissatisfaction and poor employee retention, as well as discrimination charges filed by employees who feel they have been treated unfairly. Because employee handbooks are often used as an internal reference manual, handbooks also serve as invaluable tools for managers and supervisors in their day-to-day decision-making and interactions with employees.

As you pointed out, some employers are concerned that a handbook will limit their flexibility and discretion in formulating and implementing workplace policies. However, as mentioned previously, failure to delineate and then apply personnel policies and practices consistently can result in a claim of unlawful discrimination. A handbook can also incorporate and preserve the flexibility that an employer needs by reserving the employer’s right to revise, rescind, and supplement the handbook’s provisions at the employer’s discretion.

Assuming that you do decide to develop an employee handbook, it is important that the handbook be kept up-to-date and current with the law. Because of the frequent changes in California employment law, and because of the complexity of those laws, an employee handbook should be thoroughly reviewed and updated every two to three years. You may also want to consider translating your handbook into languages other than English, depending on the languages spoken by your employees. Employers are required to provide certain policies in a language other than English if 10% or more of their employees’ primary language is not English. Those policies include those regarding the Family Medical Leave Act, and Pregnancy Disability Leave.

All of your handbook’s policies should be relevant to your workplace and should not attempt to regulate conduct outside of the workplace.While the specific types of policies that you will include in your handbook depend in large part on the nature of your business, there are several policies that should be included in all employee handbooks. These include an at-will employment policy, a drug free workplace policy, an unlawful discrimination and harassment policy, an equal employment opportunity policy, a wage and hour policy, a vacation policy, a sick leave policy, and a leave of absence policy.

Once your handbook is completed and is in place, it is important to make sure that your employees—especially your managerial, supervisorial and human resources employees—understand your handbook and the policies that it contains. You may want to provide training to make sure that your staff understands your company’s policies, and to answer any questions that they may have. Once properly drafted and implemented, an employee handbook and the policies it contains can be extremely useful and beneficial for an employer.

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