This jurisdiction-neutral Checklist is from Practical Law Company's online know-how service and highlights items to consider when reviewing employee handbooks for private, nonunionized employers, including at-will and other disclaimers and necessary provisions. To gain access to related resources including state-specific guidance and others referenced in this checklist, please visit us.practicallaw.com.
Be aware that employee handbooks are often considered contractual in nature. In many states, certain provisions in an employee handbook have been found to create implied contractual terms of employment. For example, an employee may argue that an employer's failure to follow disciplinary provisions was a breach of contract. For this reason, handbooks must:
View the handbook as a potential exhibit. While a handbook is a useful way to communicate an employer's policies to employees and answer commonly asked questions, it also often becomes an exhibit in any employment-related litigation or administrative proceeding. Policies in a handbook should:
For more information about employee handbooks, see Practice Note, Employee Handbooks: Best Practices.
Obtaining information about the employer and its workforce will assist with a thorough review of a handbook. Best practice is to:
Verify the size of the employer's workforce. The employer's duty to comply with various federal employment laws depends on the number of employees.
Confirm whether the employee handbook will be distributed to employees in a single or multiple states. This impacts whether the handbook must comply with only one state's law, or whether it must drafted to meet requirements in multiple jurisdictions.
Identify the city and state where employees are located, which may differ from the location of the employer's offices or headquarters. Knowing the geographic locations of all employees to whom the employee handbook will be distributed will determine which state's laws must be complied with. It is also helpful to know the city where employees are located in case a local ordinance or law imposes additional requirements.
Ascertain the nature of the employer's business and organizational structure. Is the employer a private or public company? What industry is the employer in? This information helps determine if there are specific policies that may be particularly important to include in an employee handbook. For example, is the employer a publicly traded company that must comply with the whistleblower protections under the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010?
Clarify whether the handbook will be given to employees that are nonunionized or unionized, or both. This Checklist focuses on reviewing handbooks for private, nonunionized employers. Additional issues must be considered if a handbook will be distributed to a unionized workforce. Unionized employees' terms and conditions of employment generally must be bargained collectively and are often governed by a collective bargaining agreement, which must considered when drafting a handbook. For more information about additional considerations when a handbook is distributed to unionized employees, see Practice Note, Employee Handbooks: Best Practices: Compliance with the National Labor Relations Act.
Confirm that handbook provisions comply with federal employment laws applicable to the employer. The applicability of various federal laws depend on the size of an employer's workforce. For example, the anti-discrimination provisions of Title VII of the Civil Rights Act of 1964 apply to private employers with 15 or more employees. The leave protections under the Family and Medical Leave Act of 1993 only apply to employers with 50 or more employees. For more information on federal employment laws applicable to the workplace, see:
Verify that handbook provisions comply with applicable state laws. In addition to federal law, handbooks must comply with the law in each jurisdiction in which they will be used. Common areas in which state law may impose different or additional obligations on employers include:
Consider local laws that may apply to provisions in the handbook. Some cities and counties impose additional obligations that employers must comply with. These laws should be reflected in a handbook's provisions. For example, employers that have employees located in San Francisco must provide paid sick leave at a designated rate.
Certain disclaimers are critical to include in a handbook distributed to nonunionized employees.
Make sure there is an at-will provision. The at-will provision should inform employees they are employed on an at-will basis and that nothing in the handbook is to be construed as creating a contract of employment.
Confirm the employer's right to modify the handbook. Ensure there is a provision stating the employer's ability, without notice, to unilaterally revise, rescind or modify the provisions and benefits described in an employee handbook, except for the at-will provision. For more information, see Standard Clause, Employee Handbook Disclaimer.
Ensure the handbook includes an acknowledgment form. The handbook should include an acknowledgment form for employees to sign and return to the employer. The acknowledgment should state that they:
For information about how these disclaimers must be revised if included in a handbook given to unionized employees, see Practice Note, Employee Handbooks: Best Practices: Compliance with the National Labor Relations Act.
Check for inclusion of certain policies. While anti-discrimination, harassment and other policies are not required to be included in an employee handbook, many employers include them to demonstrate compliance with these laws and to communicate that commitment to employees. These include:
Verify that protected classes under state and local law are included. These policies should also identify protected classes under state and local laws and include a clause to that effect.
Review wage and hour policies for compliance with state and local laws. These include statements regarding:
For more information, see Wage and Hour Laws: State Q&A Tool. For a policy compliant with the federal Fair Labor Standards Act of 1938 (FLSA), see Standard Document, Payroll Practices and Compensation Policy.
Ensure employee classifications are clearly defined. To make sure employees understand which of the employer's policies apply to them based on their classification, and to ensure the terms are used in a consistent matter in various policies, the handbook should be clear as to what is meant by various employee classifications, such as:
Review employee conduct policies for specificity and compliance with applicable laws. These policies should be clearly drafted to identify prohibited activities, while avoiding infringing on employee's rights under the NLRA to engage in protected concerted activity. Examples of these types of policies include:
Confirm that a progressive discipline policy, if included in the handbook, is not overly detailed or rigid. While employers should practice progressive discipline with their employees, it need not be written in a policy. If a progressive discipline provision is included in a handbook, it should be drafted carefully so that it does not create a presumption that an employer may only terminate an employee for-cause or only after all the steps in the discipline policy have been taken. Specifically, a progressive discipline policy should:
Ensure that policies addressing leave required by federal law are included in the handbook.
These laws include, for example:
For more information about leave policies, including whether they are required or recommended, see Practice Note, Employee Handbooks: Best Practices: Time Away from Work and Employee Leave.
Include any policies required by state law to be included in the handbook. Some states may require certain policies to be included a handbook, if the employer maintains one. For example, California requires the inclusion of certain policies, such as those addressing:
Verify that all leave policies comply with state and local laws. Leave policies included in handbooks must comply with state and local laws, including:
For more information, see Leave Laws: State Q&A Tool and Leave Policy Language: State Q&A Tool.
Ensure that policies regarding employee benefits are not unnecessarily detailed. The benefits section of a handbook should be reviewed to ensure that it:
Consider including a disclaimer that benefit plan documents rather than the handbook control the terms of ERISA benefit plans. For a sample disclaimer, see Standard Clause, Employee Handbook Disclaimer about Employee Benefit Plans.
For more information, see Practice Note, Employee Handbooks: Best Practices: Employee Benefits.
Critique whether the handbook is easy to read and understand. An employee handbook should be organized so that information is easy to find. It should be written in clear, simple terms so that it is easily understandable.
Verify that the handbook reflects the employer's actual practices. The policies and procedures in the handbook should be consistent with the employer's actual practices. For example, ensure that a progressive discipline policy included in a handbook conforms to the employer's practice.
Ensure that policies and terms used in the handbook are consistent. Since policies may be added or updated at different times, ensure that they do not contain terms that contradict each other. Also, defined terms should be used in a consistent manner throughout the handbook. For example, is a full-time employee defined the same under the employee classification section as the benefits section?
Eliminate ambiguous wording. Any ambiguities in the handbook will be construed against the employer. Revise any wording that is unclear or confusing. For more information, see Practice Note, Employee Handbooks: Best Practices: Drafting Guidelines and Tips for Organizing a Handbook.
Assess whether any portion of the handbook should or must be translated. While generally not required to be translated, if the majority of an employer's employees speak another language, it may be worthwhile to have an employee handbook, or any portion of it, translated to ensure employees understand it. In some states such as California, certain policies must be translated, such as those regarding pregnancy leave and family and medical leave (see, for example, State Q&A Tool: Leave Policy Language: California: Question 1: Family and Medical Leave Policy and Question 7: Pregnancy Leave Policy. For information about other states' leave laws, see Leave Policy Language: State Q&A Tool.
Recommend redistribution and reacknowledgment of updated handbooks. Depending on the amount of revisions to a handbook, an employer may consider redistributing the entire handbook or only those policies that have been updated or revised. In these cases, employers should: