Employee Handbooks: A Necessity For All Businesses, Great Or Small


Cook, Yancey, King & Galloway, APLC

by Brian R. Carney

Employee handbooks provide employees with a general description of the terms of their employment, such as wages, hours of work, benefits, work rules, and standards of conduct. Unfortunately, many small business owners think that employee handbooks are only for large corporations and multinational employers. Given today’s litigious environment, the reasons for having a handbook continue to mount irregardless of the employer’s size.

The most important reason for having an employee handbook: it is the most effective way to communicate the same information to all employees. No business can reasonably expect to gather all employees in a single place at the same time to announce its employment policies. Today’s workforce is fluid, and policies are continuously updated. Employee handbooks not only provide an easy mechanism for ensuring that employment policies are uniformly and consistently stated over time, they provide the employer with a record of what policies it has announced and that a particular employee has been put on notice of its policies (assuming that written acknowledgment of receipt of the handbook is required).

Employee handbooks may also prevent unlawful employment practices and minimize the probability of employment-related litigation. While employers are free to act for “bad” reasons or “no” reasons as long as the reasons are not prohibited by law (i.e., employment is at-will), a growing body of jury verdicts and court decisions teach us that “good” reasons often provide the best defense against discriminatory application of employment policies. This will also help defend against unemployment insurance claims. Assuring uniform application of policies is not as easy as it sounds; it can only be achieved if the policies are clearly stated and effectively communicated to the employees. Moreover, a properly written handbook will contain a non-discrimination/anti-harassment policy, providing another possible defense to such claims. In addition, the task of creating a handbook may focus an employer on arcane legal requirements it might otherwise overlook, such as how to handle a request for time off for jury duty (Louisiana law requires the employer to pay one day’s wages during the jury service without reduction in sick, personal, or other leave benefits).

Another reason for having an employee handbook is that it can save you, your supervisors, or human resource personnel from having to answer time-consuming questions concerning vacation time, leaves or absences, tardiness, etc., issues which can easily be addressed in the handbook.

Of course, a poorly-written handbook may create more exposure than not having a handbook at all. Hence, it is critical that employers ensure that the stated policies in any handbook comply with all federal, state and local laws regarding employment, that the policies avoid contractual commitments of any kind, and the employer should maintain maximum flexibility.

In sum, the advantages of having an employee handbook far outweigh any disadvantages. Indeed, a comprehensive handbook specifically-designed to meet your business’ needs will go a long way toward avoiding potential legal troubles, and will help maintain good employee relations. As the old adage says, “an ounce of prevention is worth a pound of cure.”