An employee handbook is a shortened version of a company’s official policies, procedures, working conditions, and behavioral expectations. The handbook is usually given on the first day of employment and is meant to guide employee actions in the workplace. Employee handbooks generally also include information about:
- The Company
- Employee Compensation and Performance Reviews
- Employee Benefits including Paid Time Off
- Leave of Absence
- Code of Conduct outlining appropriate behavior
- Complaint Procedure
- Additional terms and conditions of employment
Benefits of Having an Employee Handbook
The most important reason for having an employee handbook is to reduce your liabilities through misunderstandings of mutual expectations. Not having an employee handbook may lead to state and federal agencies to dig more deeply into your business practices to determine your compliance with wall postings, payroll accounts, etc. which could then lead to severe penalties if you are not in compliance and up to date.
Here some other important reasons for having an employee handbook:
- It acts as a clear communication tool in which the employer may state employment expectations and consequences for not meeting those expectations.
- Employers who have written employment policies are able to point to specific policies or practices when counseling or disciplining employees. When these policies are not in writing, it is easier for the employee to plead ignorance, which may extend the counseling period.
- It defines the employment relationship and establishes the employment-at-will relationship.
- It proves that the employer’s policies are consistent with current employment laws. For example, policies regarding equal employment opportunity, harassment, overtime and leave procedures can help to show that the employer abides by current employment laws.
- It serves as a reference guide for both the employee and the employer, thereby eliminating common misunderstandings and unreasonable employment expectations.
- Employers use the policies in an employee handbook to protect themselves from lawsuits such as:
- Harassment claims
- Wrongful termination claims
- Discrimination claims
Employees are expected to review and be familiar with the contents of the employee handbook. Most employers require employees to sign a statement to demonstrate that the employee has read, received and understand the employee handbook and agrees to abide by the contents.
Additionally, the statement contains a disclaimer, that the employee understands that the contents are simply policies and guidelines, not a contract or implied contract with employees.