A well-written employee handbook serves a vital role in the workplace. It outlines key policies, provides ground rules for conduct and helps create a positive and successful working environment. It can also protect you legally if questions arise about fair and consistent treatment.

On the other hand, a poorly written handbook or one with inconsistencies can cause legal problems down the road. Your employee handbook should address common situations that occur in your workplace, while allowing enough leeway to handle unique circumstances in the best way possible. It’s also important that you keep your handbook up-to-date with all federal and state employment laws.

An employee handbook is an important tool to help new and existing employees understand your company background, procedures and culture.

Avoid making these common mistakes (or worse, violating the law) with your employee handbook:

1. Irrelevant or confusing language.

Your employee handbook should be specific to your organization and reflect the way your company actually works. A document filled with boilerplate legal statements or overly general policy statements won’t be useful for your employees. Instead, provide specific details about what your organization does, why it exists, how it is structured and what the culture is like. Explain in plain terms what your company’s expectations for employee conduct are and how infractions will be handled.

2. Not including important policies.

Your employee manual should be the go-to resource for all of your company policies and operating procedures. Put everything in the handbook so employees don’t have to search through various documents, online resources or old emails to find policy statements. Be sure to update the handbook as new laws or procedures come into play. For example, if you adopt new technology that changes how vacation requests are handled or create a social media policy to address concerns about employees divulging trade secrets, include it in your employee handbook.

3. Unclear policy details.

Your employee handbook should include details for how employees report a violation (such as in sexual harassment claims) and what enforcement of a policy includes (such as possibility of termination). Include details about who to contact (by title) for reporting infractions or making requests. Also be sure to make distinctions between guidelines (non-mandatory suggestions) such as “employees are expected to dress professionally” and policies (mandatory requirements) such as “safety helmets required at all times in loading areas”.

Guidelines and policies are not the same thing. Guidelines are non-mandatory recommendations. Policies are formalized statements with requirements for how to perform a function or task – and violations may be disciplined.

4. Promises or implied contract.

While spelling out all of your policies is important, including the wrong sort of details, such as the exact steps in a progressive discipline policy or how many days a harassment investigation will take, can backfire. An employee handbook shouldn’t read like an implied contract (“follow these rules and you will do well here”) but rather provide guidelines for behavior and reassure employees that consistent policies will be applied. Be clear about the consequences of policy violations (“violation of this policy may result in dismissal”) but allow some room to address special circumstances.

5. Omitting important legal statements.

Don’t overlook key federal and state employment laws when creating your employee handbook. In particular, be sure to include statements about:

  • At-will employment. In all states except Montana, at-will employment is assumed. This means that either you (the employer) or the employee can end the employment relationship at any time. Keep in mind that stating or implying that employees will only be fired for good cause (or policy violations) in your employee handbook may negate the at-will agreement in certain states. If your employees are bound by other contracts, be sure to state that in your employee manual.
  • Equal-opportunity employment. Federal law prohibits discrimination based on “protected classes,” such as sex, nationality, religion, age, race, disability, genetic information and pregnancy, so including this statement in your handbook ensures employees that your hiring practices conform.
  • Anti-harassment policy. Spell out what behaviors your company (and state) considers to be harassment, such as the use of racial epithets; slurs or negative stereotyping; threatening, intimidating or hostile acts; or unwanted sexual advances. Explain how incidents should be reported, and what will happen next. Avoid listing specific follow-up steps or time frames (such as “resolution within 5 days”), so you don’t restrict your options for dealing with individual situations.
  • Safety and security. As an employer, you’re required to comply with Occupational Safety and Health Administration (OSHA) requirements. Make sure your employees are aware of the safety procedures you have in place for injury and accident prevention as well as protocols for treatment and reporting of incidents.

By default in all but one state (Montana), employees are hired at-will. That means they can be fired (or quit) for any (legal) reason.

6. Not checking state laws.

Some state employment laws are more restrictive or specific than federal laws. Make sure your policies are compliant with both. If you have employees working in other states, their laws may apply. For example: certain states require payout of unused vacation time, longer family and medical leave, offering short-term disability coverage, providing a final paycheck as an employee departs, or giving employees access to their own personnel files. Have your handbook reviewed by your legal team periodically to ensure it remains compliant.

7. Being too intrusive or overly broad.

Make sure your policies don’t appear to violate any privacy or personal rights. For example, your social media policy can’t specify that employees avoid talking about your business on their personal accounts or prohibit them from discussing their salary or terms of employment. Even drug use rules (and testing) can be overstepping the law in some states.

The National Labor Relations Act prohibits overly broad language in confidentiality policies. Make sure yours doesn’t imply employees can’t discuss their job, position, hours or wages, which are protected topics by law.

8. Failing to include disclaimers.

Be sure to include a disclaimer in your handbook stating that nothing in it constitutes an employment contract and/or alters the at-will employment relationship. In fact, consider removing any language that talks about a probationary period and, instead, claim the right to terminate employees at any time. Also include a disclaimer stating that the handbook doesn’t address every workplace situation, thus reserving your right to handle disciplinary issues as needed.

Be careful to balance the legally protective language you use with plain and clear instructions for your employees. Your employee handbook shouldn’t read like a legal petition but rather a helpful guide for success.

9. Not communicating policies with employees.

Including policies in your employee handbook may not be enough. Make sure you task managers and supervisors with communicating and implementing all policies. Also, be sure the handbook is accessible to all employees –whether it’s distributed electronically or via printed copies.

You can help your employees be successful in their jobs, and in turn, help your company be successful in its mission, by creating an effective employee handbook. That means ensuring compliance with applicable laws and offering clear and consistent guidance to your employees while reserving your right to act in the best interest of your business.

The Company Policies Smart App can help you create a compliant employee handbook by providing recommended policies and templates that reflect the most updated federal and state laws.

Key Takeaways
  • Make sure all of your company policies are included in your employee handbook.
  • Avoid language that implies outcomes are guaranteed or that continued employment is assured if rules are followed.
  • Be consistent in how you apply company policies and in how you describe them.
  • Always include a disclaimer in your employee manual reserving the right to handle policy violations as you see fit (including termination).