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Establishing Company Policies and Employ

There is no law that states that companies must have employee handbooks. However, employee handbooks are a good idea, once a company has more than one or two employees. Definitive and universal employment rules give employees guidance and assurance that all employees will be treated under the same set of policies.  Employee handbooks also provide companies with important legal protection – if an employee challenges an employer’s actions in court, the company can point to its employee handbook as evidence of how the company operates with respect to its employees.

However, it is critically important to use caution when establishing company policies, whether they are formal written regulations or informal rules and common practices that are “just known” by employees.  Companies should carefully review all employee handbooks to make sure policies and procedures comply with applicable employment laws and to avoid potential legal issues with personnel.  Otherwise, the employee handbook could potentially serve as evidence against the company in a lawsuit filed by an employee claiming the company engaged in an illegal employment practice.

Topics to include in an employee handbook include:

  • Introduction, with mission statement and business history
  • Working hours and attendance, including hours for full-time and part-time employees and overtime policies and procedures
  • Pay, clearly stating how pay and salaries are set and how raises and bonuses are determined
  • Employee benefits
  • Alcohol and drug abuse policies, including testing and help with substance abuse
  • Illegal harassment, describing what behaviors are prohibited and what actions employees should take if they have evidence of illegal harassment
  • Discipline and prohibited employee conduct, clearly describing conduct that may result in discipline or termination and stating that the company reserves the right to discipline or terminate for reasons not stated in the handbook
  • Discipline policy, but the employee handbook should state that the company reserves the right to use a different type of discipline than the one described in the handbook if the need arises
  • Safety issues, stating safety rules and the procedure for reporting dangerous conditions and injuries
  • Use of personal email, telephones, etc. on company time and the use of company email and phones for personal reasons
  • How the company will handle conduct and situations not covered by the employee handbook
  • Description of at-will employment, clearly stating that the employee handbook is not a contract of employment or a guarantee of continued employment 

Our law firm routinely works with employers before and after an employment handbook has been developed to ensure that all policies and procedures are in compliance with current federal and state regulations and to avert expensive legal disputes with employees.


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