Writing an Employee Handbook: A Business Tool that Should be Taken Seriously

By February 8, 2024 Labor and Employment

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Whether you own a small or large business, an employee handbook is an important asset for any successful company.  From a management perspective, an employee handbook is often an employee’s first official introduction to the company and can set the tone for their experience.  A good employee handbook will also clearly explain the expectations of the employer, create consistency across the company’s business operations, and serve as a resource for employees to turn to when they have questions.

From a legal perspective, a well-written employee handbook can help to ensure that employees are aware of the employer’s important policies.  This is especially true if employees have signed a clear acknowledgement form.  Moreover, should a legal dispute arise, a well-written employee handbook can aid in an employer’s defense.  On the other hand, a problematic handbook may be used against the employer in a legal dispute.

Because federal and state laws change and can be quite complex, it is critical that an employer regularly seek legal assistance when creating, updating, or revising an employee handbook.  An employee handbook should, among other things, cover the following topics:

  • Employment Classification. An employee handbook should clearly identify whether employment is at-will.  It should also clarify which employees are exempt or nonexempt from minimum wage and overtime pay under federal and state law.  Employers may also wish to tie certain benefits to a particular employment classification (e.g., 401k contributions, life insurance, or paid time off).
  • Payroll and Compensation Policies. An employee handbook should also explain when and how an employee is paid and considered for pay adjustments, as well as the criteria for bonus consideration.  An employee handbook should also give employees notice that, under federal and state law, an employer is required to take certain deductions from their pay.
  • Employee Benefit Policies. An employee handbook should clearly explain the company’s benefit programs and benefit eligibility.  These policies may include, for example, health insurance, paid time off, life insurance, or retirement plans and contributions.  These policies should be drafted in a way that allows the employer to change or adapt employee benefits as business needs inevitably change.  In addition, some baseline benefits are required by law and need to be included in an employee’s benefits.
  • Workplace Policies and Standards. An employee handbook is an excellent forum for a business to explain its expectations and policies related to an employee’s day‑to‑day duties.  For example, an employee handbook might discuss policies and standards around conduct, romantic relationships in the workplace, attendance, performance, dress and grooming, use of electronic devices and/or social media, codes of ethics, or remote work.  Many, if not all, of these policies can fall within the scope of federal and state laws, and employers should ensure that their policies do not violate labor or employment laws.
  • Health and Safety Policies. Federal or state law may require certain types of employers to implement health and safety policies or standards in the workplace.  Employers may also wish to implement policies around drug or alcohol use, drug testing, or smoking in the workplace.  Employers should work with an employment law attorney to ensure that these policies do not violate federal or state law.
  • Labor and Employment Laws. It is critical for an employer to follow federal labor and employment laws, and legal disputes often arise when employers do not have clear policies that outline and comply with these laws.  Some of these federal laws include the National Labor Relations Act, Title VII of the Civil Rights Act, the Americans with Disabilities Act and amendments, the Family and Medical Leave Act, and the Pregnant Workers Fairness Act.  It is equally important that employers comply with state labor and employment laws, such as the Maine Human Rights Act, timely pay of wage laws, rest break and minimum wage laws, sexual harassment laws, and Maine’s family and medical leave laws.
  • Reporting Policies. An employee handbook should also outline a clear reporting policy and procedure that encourages employees to report violations of the employer’s policies, or federal or state law. Implementing policies and procedures that provide whistleblower protections, anonymous reporting, and multiple avenues to file a report can help to protect both the employer and the employee by allowing the employer to intervene before reported violations become larger issues.
  • Acknowledgment Forms. At the end of an employee handbook, there should always be a clear acknowledgment that covers the substance of the handbook, including the terms of employment, as well as an acknowledgment of at-will employment and contract disclaimer.  A well-written acknowledgement can be instrumental to an employer’s defense in an employment dispute.

Employment law is constantly changing, and it is almost always a good time to create, update, or revise an employee handbook. Perkins Thompson has the resources and expertise to ensure that your employee handbook is an asset for both your company and your employees.  For more information or a consultation, please contact one of our attorneys in our Employment Practice Group.