What makes a good employee handbook?

by Sage Employer Solutions Blog, December 01, 2016.

If written correctly, the employee handbook can be a terrific resource for the employer and the employee. There are several elements that should be included within that relate to the company’s history/mission, values, policies, procedures, and benefits. Make no mistake about it, the handbook is often viewed as a means of protecting the company against discrimination and unfair employment practice claims but will also provide an outline of the general expectation that the employer has for its employees. Don’t confuse the employee handbook with a policy and procedure book. The two are different. A policy is a written statement that reflects the employer’s standards and objectives relating to the various employee activities and employment related issues. You can see clearly there is a difference. It is advisable for you to include legal counsel input as you craft an employee handbook. The handbook should be generic enough for the employees to know what is expected of them but provide enough guidance leading them to where they can go for the actual written policies of the company (which may exist in other department specific documents and/or standard operating procedure guides). Including legal counsel will ensure your policies conform to updated federal and state guidelines.

Employers should ensure the handbook is distributed to every employee within the organization (regardless of specific levels or job titles) and secure a written acknowledgement of their employees who have received the handbook, thus ensuring that all employees have read and understood the contents. Once the employer receives the acknowledgment, it should be secured in each employee’s personnel file. This is a very important step. A checklist should be developed to ensure that every employee’s acknowledgment (complete with signature) has been received. Written returned employee handbook acknowledgments should be readily available for you but completely secured with limited access. Keep in mind that state laws vary on electronic record retention schedules. Again, partnering in with your legal counsel will ensure your company remains compliant.

Handbooks should never be construed as an employment agreement; which could affect the employer’s “at-will status” with the employee. Handbooks should always be reviewed by legal counsel before distribution to the employees. Consult professional legal guidance for clarity in defining the differences between state and federal laws.

What if an employee handbook already exists at a company?

If your job now includes responsibility for employee handbooks, all the employer’s policies and procedures should be reviewed again to ensure they contain all of the provisions that the employer wants contained within as well as ensuring all applicable state and/or federal provisions have been included.  No assumptions should be made. Begin the process from scratch and cross-reference with the handbook that already exists. If the policies in the current handbook don’t make sense to you, they more than likely won’t make sense to an employee once reissued (or may be misunderstood by current employees). Rewrite the policy and provide your draft to legal counsel for review. If a policy doesn’t exist, write one. Partner with the appropriate department leads to which any policy affects. Have them review it first and then partner with your legal counsel. Prepare as much of the draft as you can as this will save a lot of cost. Here’s an example. If it’s a policy that supports the payment of paid time off and the payroll eepartment within the organization will be the department that supports and ultimately administers the policy on a daily basis, have that department head review it to ensure it clearly conveys the intent of the policy and that it can actually be administered by that department in the manner in which it is written and intended to be administered. Again, the emphasis will be to ensure that your legal counsel has had the opportunity to review this prior to any policy issuance to the employees. This will also help ensure compliance.

What else should be in there?

Most employee handbooks include a message such as from the company owner, CEO, president, or other higher entity within the organization. It’s usually a welcome message that contains something about the company’s mission, purpose, or intent. It’s a great way to establish positive associate relations.

Of course, other important statements should be included such as, EEO, employment at-will, FMLA, COBRA, EEOC, anti-discrimination laws, ADA, and FLSA. Many other important considerations and legal mandates could apply in certain states. Again, it would be advantageous for you to have legal counsel review prior to issuance to the employees. Use all of the sources available to you; inclusive of any professional human resource organizations. If you’re not a member of any professional organization, join one that that is reputable and that you are comfortable with. Ask other professionals within your field. They will be able to help you select an organization that you can contact for introductory information. Professional human resource organizations will be able to assist you with tasks that are common to professionals within your industry. They may also be able to provide samples, templates, toolkits or checklists of items that you may have forgotten or for topics and/or items you weren’t even aware of because you are new to the field or performing this task.

Considerations for distribution to employees

Posting to your company intranet is a great way to communicate the handbook, however you need to be sure that there has been a mechanism created that can legally obtain the employee’s signed written acknowledgement. You’ll also need to consider how you will distribute the handbook to new employees.  Create a checklist to cross-reference the written acknowledgments you receive. You should receive an acknowledgement from every person of your organization, regardless of level or position within the company. Employee acknowledgements should be housed in a secure location, with access kept to a minimum.

Updating the handbook in between cycles

So, you’ve just finished updating your employee handbook and distributed it to the employees and you have now been made aware of a new major policy. Simple: create an addendum. Once you have had legal counsel review it, post the update to your intranet, recirculate the policy to the employees and be sure to include the addendum in your next major handbook update. Check with your legal counsel to inquire if you need to obtain any written acknowledgments from the employees. Be sure to clearly reference any previous policy that has been updated. Clearly convey that the new policy replaces any other versions that may have been previously circulated. Make sure the addendum contains a date or current revision schematic (if you use one). It should be extremely clear which policy governs and be easily cross-referenced with the new policy. Sometimes it’s helpful to provide a small paragraph that outlines exact changes to the policies. These help outline the differences between the policies.


Partner in with department heads who are responsible for administering a particular policy. Ensure you take their feedback into consideration and have them approve any and all final drafts of policies.

Review all drafts for clarity, consistency, and typos.

Use current revision schematics or calendar dates where necessary.

Ensure that a draft of the final employee handbook is provided to the executive that you directly report to so he or she has the opportunity to ask questions or provide feedback.

Obtain legal review; this is extremely important.

Obtain signed written employee handbook acknowledgements from every person and level within the organization.

File all signed written acknowledgements in a secure location; limiting access to only those who will absolutely need it.

Consult professional human Resource organizations for guidance in preparation or for best practices.

Visit PacificDM.com for solutions that can help you manage the total employment life cycle.

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