A written employee handbook detailing your company's employment policies and procedures can take the place of employment contracts with many employees, and protect you if a misunderstanding or conflict with an employee develops into a termination lawsuit. In some instances, an employee handbook may also serve as evidence of terms of employment when they are not otherwise reduced to writing in a written employment contract or other documents.

How Formal Does an Employee Handbook Need to Be?

There's no need to print your handbook on fancy paper or have professional graphics. What's most important is the content, not the way it looks. You may want to use a computer software program to assist you, or you may even hire a consultant to write your handbook for you.

What Should an Employee Handbook Contain?

From an employer's perspective, the handbook should only contain provisions that are going to help the employer with respect to employment issues. In most instances, for example, there should be a statement right up front stating that, unless otherwise agreed upon in writing, employment is "at will," which means that an employee can be fired at any time without cause. Even when no express employment contract exists, an employee may be able to prove that an implied contract between the employee and employer located in the employee handbook circumscribes the general rule of at will employment. Thus, it is important to highlight the "at will" status of employees.

There should be a provision that makes it clear that the handbook is not to be construed as a contract and that it can be modified or amended by the employer at any time and for any reason. Also, include a conspicuous disclaimer in easily understood language that states that your employee handbook is not intended to encompass all company policies and procedures and stating that you reserve the sole discretion to change, cancel, amend or make exceptions.

It is also important to get a signed, dated acknowledgement of receipt of the handbook from each employee for your personnel files. If you make it a practice to present each new employee with an employee handbook on their first day on the job, you won't accidentally overlook anyone. This statement should say that they have received, read and understand the information in the employee handbook.

It usually doesn't hurt to make self-serving statements (for example, including a statement about being an equal opportunity employer even though this obligation may be imposed by law in any event). But it certainly could be a problem for an employer to include provisions in a handbook that don't reflect actual conditions of employment or that may impose unintended duties or obligations on the employer. Believe it or not, this happens all the time when employers simply decide to copy over and use a "canned" set of policies and procedures they have taken from somewhere else without making sure that the handbooks conform in all respects to their particular business operations.

An employee handbook will usually include:

• Policy statements such as those concerning equal employment opportunity (EEO), the Family Medical Leave Act (FMLA), AIDS, sexual harassment, the Americans with Disabilities Act (ADA), affirmative action and so forth
• Work rule policies such as dress codes, attendance, scheduling, smoking, parking, tardiness, substance abuse, telephone usage, uniforms, name tags, safety, accident reporting, confidentiality, outside employment, use of business equipment, security/loss prevention, housekeeping requirements for work areas, food/drink in work areas and so forth
• Procedures for specific work duties
• Definition of the work week (hours and days) as well as policies concerning shift work, break and meal periods, flexible working hours, overtime, pay periods, scheduling and travel
• Overtime and comp time rules
• Sick days and sick leave policies, including how sick leave is accumulated
• Official paid holidays
• Vacation policies, including how vacation time is accrued and rules as to how and when employees can take it
• Hiring, promotion and layoff policies
• Training policies and procedures
• Description of employee benefits as well as any required employee contributions and/or eligibility requirements
• Discipline procedures
• Grievance procedures
• Drug testing procedures (if allowed by law)
• A statement that employment is "at will"

Legal Advice

Seek legal advice from an experienced employment law attorney before finalizing your handbook to ensure that your policies do not violate any existing employment laws. A lawyer will also be able to advise an employer on important legal strategies to take into account and issues that might not be so obvious. For example, it may or may not be a good idea for the employee handbook to make reference to probationary periods of employment under circumstances where "at will" employment is intended. The concern here is that, by having a policy that provides for a probationary period, it may imply that an employment relationship is something other than on an "at will" basis (for example, permanent?) once an employee gets beyond the probationary period.

Employee Lawsuits

Employees may bring a wrongful discharge action if they believe that their employer failed to follow dismissal procedures as outlined in the employee handbook or if they believe they were discharged before the end of a term that was implied in the employee handbook.

Before filing an action, an employee must first exhaust the employer's written internal procedures for appeal, if any. A wrongfully discharged employee may be awarded lost wages and fringe benefits. An established grievance procedure can be an effective tool for minimizing claims of wrongful discharge.

Related Resources on Lawyers.com^sm

- Need a form? Access hundreds of Business Legal Forms that cover a wide range of business legal needs
- Read more Labor and Employment Contract articles and information
- Read more Small Business Law articles and information
- Selecting a Good Lawyer
- Find a Labor & Employment Lawyer in your area
- Visit Lawyers.com^sm Business Forums for more feedback and help