Employee Handbooks

An employee handbook is a manual that contains an employer's work rules and policies. It can also be used to communicate other information to employees, such as the business's history, its goals, and its commitment to customer service.

Why have an employee handbook? If you have only a handful of employees, the time it would take to assemble a handbook probably won't be worth the effort. You may still want to have some documents to communicate general work policies to employees. In many cases, this may nothing more than a list of work hours, paid holidays, and designated paydays.

However, if you have a lot of employees, you might consider creating a simple handbook. It can be used to communicate company policies regarding:

performance reviews and pay increases
vacation and other time off
company benefits
attendance and the consequences of tardiness or absence
conduct in the workplace
customer relations
your business in the community and the industry
why your business is a good place to work

Warning

While handbooks can be a positive, helpful resource for your employees and for you, there is a real danger of unintentionally creating an employment contract. If a court finds that the handbook promises continued employment, or that certain procedures will be followed, the business may find that employees have rights that the employer had not intended to create.
For example, an employer whose handbook states that an employee will be terminated for just cause may find its ability to terminate an employee limited unless it can prove that just cause exists. Similarly, if the handbook outlines the procedure to be followed when an employee is terminated, failure to follow the procedure can lead to a successful lawsuit by an ex-employee if the procedure isn't followed.
These potential risks make it imperative to:

clearly state that the handbook is a guide, not a contract
ensure that the handbook is carefully worded to avoid legally binding language
avoid provisions that promise, directly or indirectly, permanent, lifetime, or a fixed term of employment
explicitly reserve the right to change the rules, benefits, or pay structure, at any time
include a specific statement (disclaimer) indicating that the handbook is not a contract

If you choose to create an employee handbook, be sure your attorney reviews it before you give it to employees.

Other uses for employee handbooks. If you're undecided about whether to invest the time in creating a handbook, consider some of the other uses for a handbook in addition to communicating work rules and policies to employees. Provided the appropriate content is there, the handbook can serve a number of purposes:

Motivation. A handbook can give employees a sense of being a part of something larger. If your handbook includes information about the business's history and goals, it can provide a positive motivation for keeping employees excited about their jobs and involved in the company's success.
Reference. With a handbook, everyone knows the rules of your workplace. When an employee breaks a rule, you can refer to the handbook. It helps make enforcement and discipline easier.
A shield from charges of discrimination or unfair treatment. If discrimination or unemployment claims are brought against your business, your handbook can provide persuasive evidence that you had clear, reasonable rules that were communicated to employees and fairly enforced.