Handbooks and Company Policies

Handbooks and company policies are both fundamental to people management. Establishing company policies for your business is essential to communicating your rights as an employer, as well as the rights of your employees. Additionally, a company handbook, or employee manual, can be an invaluable organizational tool that clearly outlines important policies, company culture and more.

Are employee handbooks legally required?
Generally, no. However, having an employee handbook is highly recommended. It also makes providing required EEOC and DOL notices to employees easier. Some laws require that employees who do have handbooks include these notices. For example, the DOL says that employee handbooks for covered employers must include a notice of FMLA rights. Having a good employee handbook also helps you manage your workforce efficiently. Employees know exactly where to turn for important information.

What should be in a company handbook?
If you decide to create an employee handbook, several sections are crucial. You should include:

• A non-discrimination policy that spells out your obligations to provide a discrimination- and harassment-free workplace. That policy should also require that bystanders who observe discrimination or harassment report that observation.
• A contract disclaimer up front, explaining that you retain the right to change the handbook. It should inform employees they are “at-will” with no guarantees of continued employment.
• An outline of benefits and how to access them. It should explain your leave policies, including how to apply for and take FMLA leave. It should also include information for disabled employees who may need reasonable accommodations, including detailed instructions on how to start the interactive reasonable accommodations process.
• Policies on any additional leave you provide such as paid sick, vacation, parental and other time off.
• Your handbook can include a dress code. But you must make sure that dress code does not discriminate on the basis of protected characteristics such as religion, sex or disability. Plus, you should include information on nursing mothers, milk expression breaks and military leave.

And most crucially, your handbook should include a process for reporting harassment, including sexual harassment. That process should let workers know whom to contact, including someone outside their direct chain of command.

Are employee handbooks legally binding?
You do not want your employee handbook to be legally binding. Include a contract disclaimer up front. The disclaimer should specify that the handbook is not a contract and that the employer can and will change the handbook as it sees fit. If you require employees to sign on to an arbitration agreement, make sure it is a free-standing agreement. It does not belong in the employee handbook. That way, it becomes a binding contract when the employee signs it.

What company policies should I have for my business?
That depends on your business, how many employees you have and where they are located. If you are big enough to be covered by major federal anti-discrimination laws (i.e., you have 15 or more workers), you should have a policy on discrimination and harassment. That policy should highlight your commitment to not discriminate and to maintain a harassment-free workplace. It should provide for an easy, transparent way to report harassment and discrimination, a fast and impartial investigation and resolution, and a promise not to retaliate.

You should include a commitment to provide reasonable accommodations for disabled applicants and employees. Your leave policies should include your FMLA policies and commit to considering additional leave as a reasonable accommodation for disabled workers who have either not earned FMLA or other leave, or have already exhausted other leave. Company policy manuals usually also include operational and management details like details on evaluations and promotions, demotions and transfers.

Are company policies and employee handbooks the same thing?
No, though there may be overlap. Simply put, your company policies form the basis for your employee handbook, but do not all have to be included. Company policies are general directives that show managers and supervisors how the organization operates. They typically go beyond what appears in the handbook.