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COMPLIANCE BRIEF: The Importance of a Comprehensive Employee Handbook 2/12/2018

HR Compliance Brief

As an employer, the organization is in a relationship with each employee, from executives to interns. An employee handbook should clarify the terms of that relationship for all parties. In short, it helps ensure that everyone is on the same page as far as the company rules and culture are concerned in addition to keeping the organization running smoothly.

All new employees should read and agree to the content outlined in the company handbook before signing an employment contract. As updates are made to the handbook, they should be distributed and accepted by employees by way of signature. The handbook should be easily accessible in print and/or digital format to everyone in the organization so it may be used as a quick reference guide when questions arise. While the employee handbook is an official company document, if it is well-crafted, it can also be a dynamic document that reflects the heart and soul of the organization. Consider it a valuable tool, not only to hold people accountable to standards of workplace conduct, but also to communicate the company’s culture and its commitment to employees.

Comprehensive Handbook Inclusions

  • Communicate Basic HR Policies. Every organization has rules, regulations, and procedures that employees are expected to follow, as well as disciplinary procedures if the company policies are violated. The handbook should spell these out, along with operational policies, such as: start and stop times for the work day; policies related to overtime, meals, and breaks; and flex-time or telecommuting policies.
  • Establish Guidelines for Conduct. The handbook should address rules for employee conduct. This may include things such as the company dress code to who cleans out the break room refrigerator. If the organization has specific guidelines and expectations for conduct, they should be clearly defined in the employee handbook.
  • Spell Out Social Media Policies. The company has a right to limit where and when employees participate in social media activities while on company premises or while on the job. The handbook should establish clear guidelines about acceptable digital practices, including employees’ use of personal devices and engagement with social platforms during work hours. If the company monitors their online activities through company servers, it should be disclosed to employees.
  • Tell Employees What to Expect. The employee handbook should specify obligations that management has to meet, such as providing a clean and safe work environment and conducting annual performance reviews. Codifying the responsibilities of supervisors and company leadership can help foster a sense of security and prevent confusion.
  • Explain Where to Get Help. The handbook should provide clear directives on how employees should navigate challenging situations, such as claims of sexual harassment, substance abuse and hazardous working conditions. The handbook should include instructions for reporting issues anonymously and what to do when a challenging situation involves the employee’s direct supervisor.
  • Comply with State and Federal Regulations. With a variety of legal obligations related to payroll, employee benefits, and workplace safety, information related to these issues should be shared with employees through the employee handbook. Addressing these issues can help keep the organization compliant with current regulations while informing employees of their rights.
  • Share the Company Culture. The employee handbook should communicate to employees what sets the organization apart from other organizations. The introduction should address the company’s mission and vision, as well as the important role employee’s play in achieving shared goals and fostering a positive culture.
  • Protect the Business Against Lawsuits. The employee handbook can help safeguard the business against employee complaints and lawsuits. To accomplish this, ensure the language is clear and concise when it comes to spelling out expectations, regulations, and procedural standards.
  • Highlight Employee Perks. Handbooks should clearly define the benefit offerings and employer perks the organization offers. Are insurance benefits, on-site childcare, or reimbursement for parking offered? These, as well as other noteworthy perks, should be highlighted. Letting employees know the benefits and privileges to which they are entitled can address common pain points and increase loyalty.
  • Empowerment. A comprehensive handbook empowers both employees and the HR team. Putting the information directly in employees’ hands saves everyone time and hassle. Additionally it helps employees feel empowered while alleviating concerns about the HR team not providing a comprehensive and consistent message.
  • Contract. The signing of employee handbook should not be considered an employment contract. This is especially important for states like Texas that are at-will employment states, to prevent an employment contract from being inadvertently created.

Despite remarkable advances in automation, every business still runs on human capital. The employee handbook protects the return on investment in your employees in much the same way that referring to the instruction manual can help protect valuable equipment. However, an employee handbook is a legal document. Every effort should be made to have it fully vetted by internal resources and reviewed by legal counsel. Discussions with legal counsel are protected under attorney-client privilege, thereby allowing the company to express concerns and explore ideas freely as guidelines are developed for the organization.

Lastly, keep in mind that the employee handbook is a living document, and should be revisited at least annually to ensure it reflects the company’s current policies, procedures and offerings. If the employee handbook was last updated some time ago and has not been touched since, it may be time for a thorough review.


The information contained herein is for general informational purposes only and does not constitute legal or tax advice regarding any specific situation. Any statements made are based solely on our experience as consultants. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein.

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