Do I need an employee handbook?

All businesses with employees need employee handbooks to protect against a variety of risks and liabilities. Many states require employers to provide legal notices to employees, and a clearly worded employee handbook is the best way to accomplish this. A handbook will also significantly reduce disputes with employees by ensuring that everyone knows and follows company rules.

Other names for this document

  • Employee-Employer Handbook
  • Employment Handbook
  • Handbook for Employees
  • Handbook for Employment
  • Handbook for New Employees
  • Employee Policies and Procedures
  • Employee Manual
  • HR Manual

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An employee handbook is designed to help you create comprehensive, state-specific employment policies that are customized to your company's needs. Our handbook includes legally mandated policies concerning payroll, sick leave, paid time off, overtime, benefits, breaks, and jury duty. It also covers vital company policies as well as the protection of confidential information and trade secrets.

Background Information

When selecting the state of employment, remember that employment law varies drastically between states. This means that you will need to create a separate employee handbook for each state where your company has employees. The effective date will be the official date that the policies in this handbook become effective as to the employees receiving a copy and signing the acknowledgment on the last page. Usually, you are safe entering today's date for the effective date.

Company Policies

Our handbook automatically includes standardized employee policies including dress code, performance reviews, smoking policy, computer use policy, social media policy, and work from home policy. You also have the option of providing your own customized internal policies to govern employee conduct.

Payroll Information

In compliance with labor law requirements in your state of employment, our handbook allows you to make informed provisions regarding employee payroll frequency and payment methods. For further information about payroll requirements in your state, see the U.S. Wage and Labor Division's website or your state's labor website.

Meal and Rest Breaks

An employee handbook should include information regarding the minimum amount of any meal or rest breaks required by your state. If your state requires one or both of these, your company may still allow more than the state minimum. If your state does not require these, then the form builder will give you the option of allowing these breaks.

Benefits Offered

Besides health insurance and workers' compensation insurance, most benefits are typically discretionary. Federal law requires employers with 50 or more employees to provide health insurance to full-time employees, and state law may impose requirements on smaller employers. Likewise, workers' compensation insurance is typically required for all employers under their respective state laws unless they are very small or some other special exemption applies. Be sure to check your state laws if you think you may be exempt from providing these benefits. Finally, the policy will note that the company provides disability insurance in California, Hawaii, New Jersey, New York, and Rhode Island, which is required by state law.

Paid Time Off Offered

With the exception of paid sick time requirements imposed by some state laws, federal law does not require employers to provide paid time off to their employees. Other than Maine and Nevada, where certain employers are required to provide paid time off (PTO), employers are not mandated to provide PTO. Nevertheless, if you decide to provide paid time off, you have the option of providing any required paid leave upfront at the beginning of the year as an "allotted" amount, or having employees "accrue" the leave over the course of the year. You may also specify the maximum days of PTO an employee may have each year.

Sick Leave

While there are no federal legal requirements for paid sick leave, several states and localities have varying sick leave requirements for private employers, depending on the employer size. Our handbook automatically captures the required sick leave provisions in every state of employment. Nevertheless, employers are free to offer sick leave in excess of the minimum amount required by law.

Our handbook also includes a provision for Covid-19 sick leave in compliance with the Families First Coronavirus Response Act. For more information, please refer to the relevant state and local government websites.

Family and Medical Leave Programs

Under Federal law, employers that are subject to the Family and Medical Leave Act (FMLA) are required to provide 12 weeks' unpaid leave for certain medical situations. Employees are eligible to take FMLA leave if they have worked for an employer for at least 12 months, have worked for at least 1,250 hours over the previous 12 months, and work at a location where at least 50 employees are employed by the employer within 75 miles.

Several states also have family and medical leave programs, including California, Connecticut, District of Columbia, Hawaii, Maine, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin. If a state provides an employee with more generous benefits than the FMLA, employers are required to follow the state law. Applicable state family and medical leave requirements are automatically captured in the handbook.

Probationary Period

Our handbook gives you an option to include a probationary period in the handbook. Probationary periods can help employers evaluate the performance and suitability of new employees. They can also be used for the purpose of determining when employees may begin accruing benefits.

Whether or not you choose to provide a probationary period, all employees are employed on an "at-will" basis and may be terminated at any time and for any reason, with or without notice.

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Frequently Asked Questions

How often should my employee handbook be updated?

An employer should update their handbook at least annually. As employment law is an ever-changing area, it is important to keep up to date with all the changes to employment regulations. These changes should be reflected in a company’s employee handbook to safeguard both the employer and employee.

In the event that there are any updates to the employee handbook, these updates should be distributed to all employees.

Why should I have an employee handbook?

Even though there are no legal requirements to have an employee handbook, all employers should have one in place as a tool for both employers and employees to state and be aware of the terms and conditions of employment.

Additionally, an employee handbook can act as a welcome and introduction to the company for new staff, explaining expectations and compensation.

How should I distribute an employee handbook?

Employee handbooks can be distributed either as hard copies or electronically through e-mail or an internal web portal.

It is normal practice to distribute and discuss the employee handbook during a new hire’s orientation. If a company is distributing an employee handbook to employees for the first time, it may be advisable to schedule a human resources meeting to cover the main policies and procedures and answer any questions.

No matter when the employee handbook is released, the employer should always request a signed acknowledgment form from the employee to confirm receipt and acceptance of the employee handbook.

Can I use one employee handbook for different locations?

There is not a set practice regarding employee handbooks and multiple locations. Each employer must do what they think is best for their structure and what is easier for them to maintain.

It is crucial, though, to ensure that all policies and practices are correct and applicable to the employee in their area of expertise. Note that employee regulations may vary depending upon the state, county, and city the employee is located in. Some employers find it easier to have a different handbook per location, whereas others prefer to have an addendum for each location.

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Checklist

Step 1: Gather Information

As you complete your employee handbook, you will need to provide certain relevant information. This includes the employer's business address, current number of employees, and policies concerning break time, employee benefits, and taking time off. It may help to discuss these items with your director of human resources and other key personnel.

Step 2: Answer Key Questions

Use the information you collected to complete the handbook. We make this easy by guiding you each step of the way and helping you to customize your document to match your company's specific needs. The questions and information we present to you dynamically change depending on your answers and the state selected.

Step 3: Review

It is always important to read your document thoroughly to ensure it matches your needs and is free of errors and omissions. After completing the questionnaire, you can make textual changes to your document by downloading it in Microsoft Word. If no changes are needed, you can simply download the PDF version and sign. These downloads are available by navigating to the Documents section of your account dashboard.

Step 4: Obtain and File Employee Signatures

Print a copy of the handbook for each employee and have him or her sign the employee acknowledgments page at the end. Be sure to retain a copy of this page in each employee's personnel file. Make sure you receive a full copy of the handbook or have access to one at all times. 

Step 5: Provide State and Federal Disclosures

State and federal laws may require you to distribute or post relevant information regarding employee rights in conspicuous places in the work setting, including specific leave and benefits rights. These notices are usually available for free online.

Step 6: Periodically Review and Update

As your policies change or new laws pass, you will need to update your employee handbook. Typically, employers do this every two or three years.

For liability reasons, it is very important that your employee handbook reflects your current company policies. LegalNature makes this easy by saving your answers in your account. They will automatically populate the handbook when you try to create another handbook in the same state.

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