September 7, 2018

All businesses, even those with only a few employees, should have a comprehensive, well written, and legally-compliant employee handbook.  Here are just a few of the reasons why.

1.  Communicate Business Policies and Procedures

A properly written employee handbook acts as a vehicle for establishing the rules all employees need to abide by during their employment.  Without written policies setting forth business rules and procedures, employees’ expectations of their roles and duties will be unclear.  Effective manuals will include, among many other things, rules regarding employee behavior and conduct, hours of work and attendance policies, dress codes, complaint and grievance procedures, confidentiality guidelines, computer policies, copyright and trade secret policies, safety and security protocols, drug and alcohol policies, and disciplinary procedures.  Written rules tell employees what is precisely expected of them, which helps maintain superior employee performance.  This also makes it easier for an employer to terminate an employee if any of the written rules are not met by that employee.

2.  Communicate Employee Benefits

In addition to setting forth the policies and procedures employees are expected to observe during their employment, comprehensive employee handbooks contain the benefits available to employees.  For example, manuals should communicate information such as medical insurance benefits, vacation, holiday pay, sick leave, extended leaves of absence, reimbursement for business-related expenses, and other benefits available to employees.

3.  Ensure Compliance with Applicable Laws

All businesses in California, even those with only one employee, are required to have certain written policies pursuant to California law.  Having an employee handbook makes it easy to keep these required policies all in one place to ensure that employees are notified of these policies.  A legally-compliant handbook also provides a guideline for the employer to ensure compliance with applicable laws.  A handbook precisely lays out all of the legal requirements applicable to the employer under California law, including information regarding anti-discrimination and harassment policies, sexual harassment prevention policies, accommodation procedures (including lactation accommodation), payroll practices, and meal and rest break policies.  Thus, a handbook not only serves the purpose of guiding employees, but also tells employers what they can and cannot do.

4.  Ensure Fair and Consistent Treatment Among Employees

Since employee handbooks contain all of the policies and procedures applicable in the workplace, all employees are held to the same standards established in the handbook, and no employee is treated differently from another.  Certain employees are not treated more favorably than others since the handbook provides the rules employees are to follow and the benefits given to employees.  This in turn creates good employee morale since employees know they are being treated exactly like all other employees in the business.

5.  Successfully Defend (and Even Avoid) Lawsuits

Perhaps the most important reason for creating an employee handbook is to establish a good defense if a business is sued by an employee.  Employee manuals can sometimes prevent lawsuits altogether.  Virtually every employment-based lawsuit will implicate a policy in the manual, which is why it is so crucial for businesses to have every policy in written form.  For example, if an employee makes an allegation that he did not receive his rest breaks, but has no evidence other than his word to contend this, the employer can introduce the handbook which states that all employees receive rest breaks pursuant to law, which will defeat the employee’s claim.  Similarly, if an employee makes an allegation that she was wrongfully terminated, yet the stated reason for her termination was an offense listed in the handbook as one warranting immediate termination, and there is no evidence of discrimination, harassment, or any other wrongdoing, the employer can defeat the employee’s claim.  An employee handbook also gives employers an opportunity to clearly state that employment is at-will and that employees can be terminated at any time for any reason (other than an unlawful reason).  Having employees sign acknowledgment of the handbook with this provision, and all other policies and procedures, can help businesses minimize exposure and win lawsuits unfairly brought against them.

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This article is based on the law as of the date posted at the top of the article.  This article does not constitute the provision of legal advice, and does not by itself create an attorney-client relationship with Eskridge Law.