Key takeaways
- A handbook sets expectations and documents your policies, which helps both employees and the company.
- Some policies are effectively required, such as EEO, anti-harassment, and leave policies where laws apply.
- Multi-state employers usually need state supplements on top of a core handbook.
- Overly broad confidentiality or social media rules can conflict with employees' rights under the NLRA.
- Review the handbook at least once a year, and get a signed acknowledgment for every version.
An employee handbook is a written guide to an employer's policies, procedures, and expectations, given to every employee. It explains how the workplace operates and documents the policies the company is required to have.
A manager fires an employee for posting complaints about the company's scheduling practices on social media. The handbook's social media policy prohibits "any negative comments about the company." Months later the company is facing a charge with the National Labor Relations Board, because complaints among employees about working conditions are generally protected activity, and the policy was written so broadly that it could chill that activity.
The handbook was downloaded from a template site four years earlier. Nobody had read it since.
A good handbook protects the company and helps employees. A neglected one can do the opposite. This guide covers what to include, what to avoid, and how to keep it current.
Why a handbook matters
No federal law requires a handbook. But once a company has more than a few employees, it becomes the most practical way to communicate policies consistently, show that employees were informed of required policies, and give managers a reference for handling common situations. When disputes arise, a clearly written, consistently applied policy is far easier to defend than an unwritten practice.
Some laws do require written notice of specific rights, often through posters or written policies, and the handbook is a natural place to include them.
Core policies most handbooks include
Employment basics
- At-will employment statement, where applicable. Montana is the notable state where at-will employment is limited after a probationary period.
- Equal employment opportunity statement.
- Anti-harassment and anti-discrimination policy, with a clear complaint procedure and a promise of no retaliation.
- Reasonable accommodation process for disability, pregnancy, and religious practices.
- Employee classifications: full time, part time, exempt, and non-exempt.
Pay and time
- Pay schedule, timekeeping, and overtime rules, including that non-exempt employees must record all hours worked and that off-the-clock work is not allowed.
- Meal and rest breaks where state law requires them.
- Expense reimbursement.
Time off and leave
- Vacation or PTO policy, holidays, and paid sick leave as required by state and local law.
- FMLA policy if you have 50 or more employees, plus state family and medical leave.
- Other required leave, such as jury duty, voting, military leave, and domestic violence leave where state law requires it.
Conduct and workplace
- Standards of conduct and the disciplinary approach, written flexibly.
- Attendance and punctuality.
- Remote and hybrid work.
- Technology, acceptable use, and data security.
- Workplace safety and how to report injuries.
- Drug and alcohol policy, adjusted for state cannabis laws.
State supplements for multi-state employers
State laws vary widely on paid sick leave, final pay, meal and rest breaks, leave entitlements, and required notices. Rather than one handbook that tries to cover every state, most multi-state employers use a core handbook with federal and company-wide policies, plus a short supplement for each state where they have employees. California, New York, Illinois, Washington, and Massachusetts usually need the most detailed supplements.
When a new remote employee is hired in a new state, adding the state supplement should be part of the setup checklist.
Language that creates legal risk
A few kinds of language cause more problems than any others:
- Contract-like promises. Phrases like "permanent employee" or a mandatory discipline sequence that must be followed before termination can undermine at-will employment. Include a disclaimer that the handbook is not a contract and that policies can change.
- Overly broad conduct rules. The NLRA protects most private sector employees' rights to discuss pay and working conditions, including on social media and including in non-union workplaces. The NLRB has scrutinized broad confidentiality, civility, social media, and recording rules that could reasonably discourage that activity. Write rules narrowly and tie them to legitimate business reasons.
- Pay secrecy rules. Policies forbidding employees from discussing their pay are generally unlawful.
- Outdated leave and pay policies that no longer match current state or local law.
- Policies you don't follow. A policy applied inconsistently is often worse than no policy, because it suggests unequal treatment.
Writing it so people actually read it
Write in plain language, in the second person ("you"), with short sections and clear headings. Explain the reason behind policies where it helps, because people follow rules they understand. Keep legal disclaimers short and in one place. A 25-page handbook that people read is worth more than an 80-page one nobody opens.
Consider separating the handbook from operational guides. The handbook covers policies. A separate internal wiki or knowledge base can cover how-to details, such as how to submit expenses, which change more often.
Distribution and acknowledgments
Give every new hire the handbook during onboarding, and give every employee updated versions when policies change. Collect a signed acknowledgment, electronically or on paper, confirming the employee received the handbook and understands it is their responsibility to read it. Keep acknowledgments with personnel records, and make the current handbook easy to find, ideally in your HRIS or intranet.
Writing a remote and hybrid work policy
Remote and hybrid policies are now one of the most-read sections of any handbook, and they often cause the most confusion. Cover who is eligible, what the expectations are for availability and response times, whether employees can work from another state or country and how far in advance they must ask, who pays for equipment and internet, and how in-office days work for hybrid roles.
The rule about working location deserves particular care. An employee who quietly moves to a new state can create payroll tax registrations, new pay rules, and new leave obligations for the company. Require employees to request approval before working from a new state or country for longer than a short trip, and explain why: it isn't about control, it's about paying them correctly and following the right laws.
Technology and AI use policies
Many companies now include a short section on using AI tools at work. Cover which tools are approved, what information must never be entered into public tools, such as customer data, employee personal information, and confidential financials, and who reviews AI-generated work before it reaches customers. Keep it practical and update it often, since tools change quickly. Our guide to AI in HR covers governance in more depth.
Using templates without inheriting their problems
Templates are a reasonable starting point, especially for small businesses. The risk is publishing one without adapting it. Templates are often written for a different state, include policies you don't follow, or use language that is outdated. Use a template for structure, then rewrite each policy to match how your company actually works, add state supplements, and have counsel review the final version.
Keeping the handbook current
Review the handbook at least once a year, and whenever you expand into a new state, cross an employee threshold such as 15, 20, or 50 employees, or a major law changes. January and July are common effective dates for new state and local laws, so many companies schedule reviews just before them. Have employment counsel review the handbook periodically, especially state supplements.
An HRIS with document management and e-signatures makes distribution and acknowledgments much easier. See our HRIS buyer guide and our HR help desk guide for knowledge base tools.
Employee handbook review checklist
Work through this list with your team. The printable PDF version has space to tick each item off.
- Include an at-will statement where applicable
- Include equal employment opportunity and anti-harassment policies
- Provide a clear complaint procedure with a no-retaliation promise
- Explain the reasonable accommodation process
- Document timekeeping rules and prohibit off-the-clock work
- Include meal and rest break rules where state law requires them
- Update PTO and paid sick leave policies for each state
- Include FMLA and state leave policies where they apply
- Add state supplements for every state with employees
- Add a disclaimer that the handbook is not a contract
- Review confidentiality, social media, and conduct rules against NLRA protections
- Remove any pay secrecy language
- Collect signed acknowledgments for every version
- Schedule an annual review before January and July effective dates
Where to go from here
Wherever you are in the process, there is a next step that fits.
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Email templates for this topic
Ready-to-edit emails with subject lines, compliance notes, and a free PDF.
- Introductory period completion email templateConfirm that a new hire has completed their introductory or probationary period, without changing at-will status.
- Policy update announcement email templateAnnounce a new or changed workplace policy with what changed, why, when, and what employees need to do.
- Employee handbook acknowledgment request email templateAsk employees to read and sign the updated handbook, with a deadline and a simple way to do it.
- Office closure notice email templateTell employees about a weather, emergency, or planned closure, with clear instructions on work and pay.
Frequently asked questions
Is an employee handbook legally required?
What should an employee handbook include?
How often should a handbook be updated?
Can a handbook policy violate the NLRA?
Do employees need to sign the handbook?
Sources
We checked the facts in this guide against these primary sources. Laws and thresholds change, so confirm current rules before you act.
Written by the HRTally Research Team
Our guides are written and reviewed by people with hands-on US HR, payroll, and HR technology experience. Legal and tax facts are checked against primary sources, such as the Department of Labor, IRS, EEOC, and USCIS, and linked at the end of each guide. Vendors never review or pay for our editorial content.