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Employee Handbooks: What You Need to Know

As an employer, one of the best ways to avoid employment issues is to offer an employee handbook. California employers are not required by law to offer an employee handbook, but it is highly recommended. Offering an employee handbook provides a centralized location for company policies, requirements, and expectations. In addition, an employee handbook can actually prevent potential misunderstandings between employee and employer, making it an employer’s best defense when dealing with employment issues.

Within the last decade, California has seen an increase in employment lawsuits. Cases based on wrongful termination, discrimination, or sexual harassment can result in a large financial burden for an employer. As a result, the U.S. Supreme Court has ruled that California employers can better protect themselves by offering a clear and concise employee handbook that outlines employee rights and requirements.

In addition to providing employer protection, other benefits arise from maintaining an employee handbook. For example, offering a handbook tends to minimize training periods that a new employee goes through upon hire. Also, employees who have clear guidelines and written policies to follow will often remain with their employer for a longer period of time. In short, these benefits ultimately save an employer time, money, or resources.

Many new employers wonder what an employee handbook should contain. At minimum, California businesses should address the following items within an employee handbook: an explanation of “at-will” employment, the company harassment policy, email, voicemail and Internet policies, as well as leave under the Family Medial Leave Act (FMLA). For employers who require a more detailed employee handbook, additional sections within may include:

  • Introduction: Include items such as a welcoming statement, company history, and the handbook’s purpose.
  • At-Will Policy: Define “at-will" employment and how it applies to California employees.
  • Hiring: Provide an Equal Opportunity statement, information on the recruitment process, orientation, training periods, as well as employee referral programs as applicable.
  • Employment Classification: Include definitions for part-time, full-time, temporary, exempt, or non-exempt employment.
  • Hours: Specify hour requirements, meal or rest break mandates, overtime, and double-time opportunities for workers.
  • Payroll: Specify pay schedules, advances, deductions, and expense reimbursements as applicable.
  • Employee Benefits: Explain benefits such as health and life insurance, disability insurance, worker’s compensation, and 401(k) retirement savings plan options as applicable.
  • Time Off: Explain policies for vacation, holidays, paid time off (PTO), bereavement, jury duty, and time-off to vote.
  • Leave: Explain company policies for sick leave, maternity leave, leave for child school activities, military leave, and leave as specified under the Family Medical Leave Act (FMLA).
  • Performance: Specify expectations regarding job performance, and periodic performance reviews as applicable.
  • Employee Conduct: Discuss insubordination, as well as attendance, attire, and personal hygiene expectations.
  • Company Property: Explain policy regarding company property, including usage of equipment, computers, automobiles, telephones, and property return at the time of termination.
  • Workplace Safety: Specify what employees should do in case of an accident or emergency, company policies on safety and security, and company smoking policy.
  • Employee Privacy: Outline privacy policies in the workplace including telephone monitoring, cameras etc.
  • Computers, Voicemail, Email, and Internet: Explain company policies for computer, voicemail, email and Internet usage.
  • Employee Records: Specify policies outlining personnel or medical record maintenance, and confidentiality of records.
  • Drugs and Alcohol: Provide policies against drug and alcohol use, drug testing, or rehabilitation leave.
  • Confidentiality: Discuss company policies on trade secret confidentiality, and conflicts of interest.
  • Discrimination and Harassment: Explain company policies on anti-discrimination, and harassment.
  • Communication Policy: Discuss company complaint and “open-door” policies.
  • Ending Employment: Specify company policies on items such as resignation, termination, exit interviews, references, final pay, severance (as applicable), unemployment benefits, or health coverage extension opportunity under COBRA.

When issuing an employee handbook, it is critical to gain employee acknowledgement and agreement for the contents within. Have acknowledgement forms ready for a new employee to sign including: acknowledgement of “at-will” employment and acceptance of the employee handbook, and acknowledgement on the company’s email, voice-mail, and Internet policies. Many potential conflicts are easily avoided when employment terms are acknowledged and agreed upon at the time of hire.

Since there are no real negatives associated with offering an employee handbook, it’s a no-brainer for most employers. Employee handbooks save time and money, and also offer employers a shield of protection. As a result, most employers recognize that the nominal investment required for a well-written employee handbook, one drafted by a licensed employment attorney, often pays off in dividends.

Remember to keep in mind that the laws and policies that govern California businesses change over time. As an employer, it is a good idea to review your employee handbook at-minimum annually, to ensure congruence with current California legislation.

The article within should not be construed as legal counsel. The laws that govern an employer’s duties and responsibilities arising under an employee handbook are complex, and an attorney licensed in employment law should be consulted in order to review individual circumstances.


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