By Sasha Bau, Esq. and Danielle Comanducci, Esq.

An employee handbook, sometimes known as an “employee manual,” is a document that sets out the employer’s policies, procedures, and describes the various legal obligations of the employer and the employee. By and large, the employee manual functions as an effective communication tool between the employee and the employer setting out the employer’s policies, procedures, working conditions, and behavioral expectations.

There is no law requiring the employers to have an employee handbook. However, there are both legal and practical reasons that dictate having an employee handbook. On the legal side of affairs, employee handbooks set forth information that employers may be legally required to communicate to their employees. For example, certain employers are required to provide information to their employees regarding their rights under various federal and state laws, for example the Family Medical Leave Act.

On the practical side of affairs, having the employer’s policies and procedures documented in an employee handbook will help avoid misunderstandings. By documenting employer expectations, policies and procedures, employee handbooks may help create uniformity (when enforced consistently) thus helping employers avoid certain legal disputes. For example, having a clear sexual harassment policy and a mechanism for reporting instances of sexual harassment can prove critical in avoiding and defending litigation.

Further, employee handbooks provide an important reference tool to answer employees’ questions, for example, with respect to policies concerning sick leave, paid vacation, benefits, and dress codes. Availability of such reference tool cuts down the time spent by the supervisory employees formulating policies and advising the employees on the relevant issues. In turn, this makes the intra-office communication quick and efficient.

What is included in an employee handbook?

There is no one-size-fits-all employee handbook. Ultimately, what should be contained in an employee handbook depends on an employer’s particular business and the applicable federal and state laws.

The policies that an employer needs to communicate to employees by law (and therefore that must be included in an employee handbook) vary depending on factors such as the size and location of the employer’s business but may include the following:

– Family Medical Leave Act Policies. The Family Medical Leave Act (“FMLA”) 29 USC §2601 et seq., is a federal law that requires that employers of certain size (e.g. private employers with at least 50 employees, provided that such employer have 50 or more employees for each working day during each of 20 or more work weeks per year that work within 75 miles of the employee’s work site) must provide employees with up to 12 weeks unpaid leave during any 12-month period in specific circumstances (e.g. for the birth or care of a child, to care for an immediate family member with a serious health condition, or if the employee has a serious health condition). In addition, FMLA also has special provisions covering injured military servicemen and requires that covered employers provide employees with up to 26 weeks unpaid leave in a single 12-month period to care for a covered service member with a serious injury or illness. It is mandatory for employers to provide employees with notice of their eligibility for FMLA protection and their rights and responsibilities. Accordingly, employee handbooks should cover FMLA leave, leave notice mechanisms, and provide the “Employee Rights and Responsibilities” notice published by the US Department of Labor Wage and Hour Division.  Please note that many states also have laws regarding unpaid family leave and these laws must be implemented in an employer’s policies and should also be included in employee handbooks.

– Equal Employment and Non-Discrimination Policies. The U.S. Department of Labor requires many businesses to post information stating that the business follows non-discrimination and equal employment opportunity laws. Employers must comply with laws which prohibit discrimination and harassment, including with federal laws (e.g. Americans with Disabilities Act , Title VII of the Civil Rights Act , the Age Discrimination in Employment Act , the Equal Pay Act ) and applicable state laws (e.g. in New York, employers with 4 or more employees must comply with the New York State Human Rights Law ). Accordingly, it is important that employers have clear Equal Employment Opportunity policies in their employee handbook and consistently enforce such policies.

– Wage and Hour Policies. The Fair Labor Standards Act (FLSA)  is a federal law that prescribes standards for the basic minimum wage and overtime pay and affects most private and public employment. New York, like many other states, also has wage and hour laws regulating the above (e.g. New York State Labor Law ) that should be incorporated into employer policies.

– Workers’ Compensation Coverage. Many states require that employees be informed of workers’ compensation coverage in writing. For example, in New York, Section 51 of the Workers’ Compensation Law  requires that employers post a notice  of workers’ compensation coverage in a conspicuous place in their place of business (most employers obtain this notice form from  their workers’ compensation insurance carrier). However, it is also a good idea to include this notice in the employee handbook as well.

There are other federal and state laws that could apply to a particular employer, depending on factors such as the employer’s size and location. Accordingly, it is highly advisable for employers to consult with an attorney regarding their employee handbooks to ensure that all applicable federal and state laws are properly addressed. If an employer’s business operates in more than one state, then there may be legal reasons for writing different handbooks for employees in each state, as state employment laws vary depending on the state.

In addition to providing information legally required to be communicated to employees, employee handbooks typically will also include, without limitation, the following:

– An introduction that explains the purpose of the employee handbook followed by a statement of the  employer’s overall vision, values and principles, and a brief history of the business;
– Policies regarding standards of expected conduct;
– Policies regarding leave and notice of leave (in addition to those required to be communicated to the employee under the law);
– Information regarding health benefits, vacation days, holidays, and sick leave;
– Policies regarding work schedules and attendance;
– Policies regarding employee discipline with clear procedures placing employees on notice of the consequences of violating the employer’s policies;
– Policies regarding smoking, employee safety, and drug and alcohol abuse;
– Policies regarding employee use of electronic devices, equipment and work premises;
– Policies relating to the use by employees of social media and electronic communications;
– Policies on how to respond to workplace violence;
– In order to avoid implied contract claims, an employee handbook should always include an explicit statement reserving the right to alter, amend, or change any handbook policy at any time and for any reason; and
– If applicable and legally permissible, a disclaimer regarding the “at-will” nature of the employment.

All employee handbooks should also contain an acknowledgement form to be signed by the employees upon receipt of the employee handbook.

While the above is a list of information that can be legally required to be communicated to employees (e.g. through employee handbooks) and information typically included, each employee handbook must be tailored to properly address the applicable laws and the policies of each particular employer.

Overall, the key to a good employee handbook is how it is drafted. The employee handbook could be considered as a contractual obligation if a dispute is taken to court, so it is important to carefully consider the content and wording. At the same time, the handbook should be easy to understand in order to serve its purpose. It is never a good idea to insert policies into an employee handbook that look good on paper but are impossible or difficult to enforce in reality. Similarly, employers must ensure that their employee handbooks reflect the current state of the applicable law, as an employee handbook can provide an employer with valuable legal protections. For example, in some instances, an at-will policy can provide a valuable defense against employee claims of breach of contract.

Updating the employee handbook

Once an employee handbook has been finalized and distributed to employees, it is critical that it be reviewed and updated periodically. Outdated or erroneous policies can be as dangerous as not having policies at all. Employers should update their employee handbooks and distribute updated versions to their employees when there are changes in applicable state and federal laws or new information is legally required to be communicated to employees. In addition each of the below instances will warrant change or an update of the employee handbook: (i) change in policies or procedures; (ii) significant increase or decrease in the number of employees; (iii) changes in industry trends or economic conditions; and (iv) any other changes that will affect the working conditions or behavioral expectations of the employer.

Once updated, it is critical to state that the policies in the new updated handbook override previous policies (both verbal and written). Employers should also obtain signed acknowledgement forms from their employees each time that a handbook is updated and distributed to the employees.

In conclusion, employee handbooks can be a valuable communication and defense tool for employers. However, the advantages described in this article will only materialize if the employee handbook is properly drafted and the employer consistently and uniformly applies the policies contained in the employee handbook. Employers must always be careful to follow the policies as outlined in the employee handbook because failure to do so or discrepancies between actual practice and written policies may invite a lawsuit.


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