How To Write An Employee Handbook

If you are reading this, it’s likely that you already know that an employee handbook is one of the most important documents your company can create. This guidebook sets the tone for your workplace culture, clearly communicates expectations, and protects your company legally.

An incorrect, illegal, or sloppy handbook that leaves a lot of holes in your policies can be very damaging and possibly more dangerous than when you had the Wild-Wild-West happening around your company.  Savvy employees know how to take advantage of poorly written policies and take the company for a ride.

Don’t read that wrong… It IS better to have a written and published handbook.

It is however, important to do it right and make it just comprehensive enough to keep employees in line while not painting yourself and the company into a bad corner.

With no handbook, you leave tradition and past practices up for inconsistent and often illegal or discriminating use.  Unwritten or patchworked policies are open to interpretation, inconsistencies, and even litigation. With a well-crafted handbook tailored to your company, you promote transparency, productivity, and compliance.

Take it from me.  I have been writing employee handbooks, manuals, and guides for almost 30 years.  I make it a point to remain an expert in policy by studying legislative changes, best practices, court decisions, DOL and NLRB guidance, and attending lots of training updates.

This comprehensive article explores the intricacies of employee handbook creation, so you can establish clear, legally sound policies for your organization.  My last point is the most important, so hang in there.

Writing a Handbook from Scratch

If you don’t already have a handbook or your handbook is so old that it still has Henry Ford’s handwritten notes on it, you are going to need to start with a blank sheet of paper. 

While templates may seem tempting, custom crafting a handbook has many advantages. Pre-written templates can’t reflect the culture, voice, and specific policies that make your company unique.  Not to mention you have no idea who wrote it and whether they know what they are talking about.  Do all the policies apply to your environment?  Do you have multiple locations that may require different policies for each?  Is each policy based on an employment statute written to optimize your protection?  You probably aren’t going to figure any of that out until it’s too late.

Writing a handbook means researching each applicable policy and statute.  Decide what is optional, what is allowed, and what is optimal for your workforce. 

There are clear benefits to writing your own masterpiece employee handbook. When written from scratch, you can:

  • Outline sections based on your company’s structure and priorities.
  • Maintain your company’s voice and values throughout.
  • Include industry-specific details.
  • Adapt the tone for your target audience.
  • Customize compensation, benefits, and PTO policies to incentivize your employee population.

So if you are going to take the plunge into authorship, here are steps for developing a custom handbook:

  1. Identify your handbook goals. What do you want it to achieve?
  2. Research your state employment laws. Determine which ones apply to your company type and size.
    1. Then do the same for all federal laws and local municipality laws
  3. Outline the critical policies and sections to cover. Ensure you include legal requirements.
  4. It is a good idea to divide the document into well organized sections that employees can easily understand. Sections should be concise, scannable, and easy to understand.
  5. Place content in a smart order. If you place the time off policy first, is anyone going to read the rest of it?
  6. Keep format and design in mind while you are writing. The handbook should be high in readability and easy to find important points.
  7. Draft handbook content in an employee-friendly tone. Don’t just copy legal statutes or contracts. Courts rule against hard to understand legalese.
  8. Don’t violate any copyright laws either. If someone else wrote the policy and you publish it (even internally), without permission; it is against the law.
  9. Be sure to include essential topics like:
    1. Welcome statement
    2. Company overview
    3. Facilities information
    4. At-will employment statement
    5. Workplace behavior and ethics policies
    6. Anti-discrimination and harassment policies
    7. Compensation and benefits details
    8. PTO policies

12. Have an employment lawyer review the draft for any legal oversights.

13. Revise content based on lawyer feedback.

14. Finalize the handbook and obtain executive approval.

15. Publish and distribute the final handbook.

a. Decide whether you will print copies for employees or house it electronically in a shared or accessible location like a server or payroll system.

b. Keep in mind, you may need to update the new handbook at least yearly, so make a wise decision when organizing and publishing the final product.

16. Give a deadline for all employees to read the entire document and sign an acknowledgement of receipt and understanding. Keep that receipt in each employee’s individual employee file.

Upgrading an Existing Handbook

If you have an existing handbook that just needs a good dusting off and some polish, you can jump in to update the existing document.  Be forewarned… in my experience, it can actually be more time consuming and rigorous fixing and updating someone else’s out-of-date work.   

A best practice is to review your handbook annually and update policies when necessary to stay current. As laws and norms evolve, your handbook needs to as well. Setting aside time annually (and sticking to it!) will make your life a whole lot easier.  Short and easy chunks of update keep things fresh and up to date. Regularly updating your handbook shows employees you value transparency and encourage feedback.

If you have decided to just update ol’ Henry’s original work, here is a process for updating an existing handbook:

  1. Review your handbook goals. What do you want it to achieve? Does the current document align with the company’s goals?
  2. Research your state employment laws. Determine which ones apply to your company type and size.

a. Then do the same for all federal laws and local municipality laws

b. Look especially for laws and regulations that have been in the news or have been updated since the last publish date. Note changes needed for compliance.

  1. Review all sections and policies. Look at the order and organization and decide whether they make sense or need an overhaul.
    1. Make note of any employee or policy issues you have dealt with recently and determine whether they require new policies or modifications to existing policies.
  2. Revise language and add new policies to reflect evolving company culture.

a. Focus on removing unconcise language or legalese.

b. Determine if new policies are required to reflect or shape culture

6. Have your lawyer review changes to ensure ongoing compliance.

7. Update printed and digital handbook copies with attorney edits.

8. Notify managers of changes and provide training before distributing to employees.

9. Distribute the published document and communicate handbook changes to employees.

a. Wherever material (important or impactful) changes are made to policy, point out the changes to employees in memo form.

b. Decide whether you will print copies for employees or house it electronically in a shared or accessible location like a server or payroll system.

Dangers of Using Templates

I have been writing employee handbooks for nearly 30 years.  I have seen, read, edited, and vetted dozens of templates in my career.  I have never found one that was adequate.  For many and varying reasons, templates fall short in every case.  If you rely on one to protect your company, it will fail because it is unaware of your company’s environment, size, location, and culture.  If you rely on it as a starting point or foundation to start from, you will find it harder than starting from scratch.  You will end up taking more time reading and understanding what is there only to then still have to figure out what is missing, what doesn’t apply, and where policy details fail to protect you and your company.

Some of the Possible Dangers Include:

  • Overlooking laws that apply to your business, leading to non-compliance.
  • Vague, boilerplate language is difficult to interpret and enforce.
  • May reference policies your company doesn’t actually offer.
  • Unclear policies increase litigation risk.
  • Lack of customization can disconnect the handbook from your actual culture.
  • Norms specific to your industry may be missing.
  • Out of date language and policies that put you in danger.
  • Templates that try to be everything to everyone end up being a mile wide and an inch deep. They miss more than they hit.

If you are going to ignore this article’s recommendations, be sure to review any template thoroughly from compliance and cultural fit perspectives before attempting to use it.  Find out who wrote it and when it was written.  Look for location specific policies that give clues to geography as well. 

Horror Stories: When Vague Policies Go Wrong

Going without a comprehensive published handbook is just rolling the dice with your company’s wellbeing.  It is simply a question of when it will cause you problems… just pray they aren’t seven figure legal problems.

 Poorly drafted or outdated policies legally endanger companies. Employees have won major lawsuits due to unclear handbook language.

Some Real-World Examples:

Violating At-Will Employment 

One handbook’s discipline policy was written so as to create an employment contract. By outlining warnings before termination, the company put itself in handcuffs and required a process that is not required by law. An employee argued this violated at-will employment and won $250,000 in a wrongful termination suit. Guz v. Bechtel National, Inc., 8 P.3d 1089 (2000)

Unclear Bonus Policy

A handbook promised “satisfactory performers” would receive a bonus. Employees who got no bonus sued over the ambiguous language, resulting in a $2.85 million settlement. A simple language oversight ended in a seven-figure loss to the company.  Had they simply added one word: “discretionary” to the bonus policy, they may have changed their fate. Sabatini v. Its Amore Corp., 455 N.J. Super. 608 (App. Div. 2018)

FMLA Confusion 

A company handbook mentioned only 6-8 weeks medical leave in their Family and Medical Leave Act policy. Unfortunately, that is less than the 12 weeks actually provided and protected by the FMLA. A court ruled against the company for failing to properly communicate FMLA rights.  That wasn’t even a decision based on the company acting incorrectly or refusing to give an employee something they were actually entitled to!  It was simply a mistake in the handbook that lost them money, time, reputation, and the case.  The jury awarded $374,000 to the plaintiff. Hicks v. City of Tuscaloosa, 870 F.3d 1253 (11th Cir. 2017)

These sobering examples demonstrate the legal hazards of poor handbook policies. For many companies, a two-million dollar or even a three-hundred and forty-seven thousand dollar verdict could destroy the organization.  If you are committed to establishing or updating your handbook (and you should be!), then commit to doing it right.

Downsides of Attorney Written Handbooks

We would never tell anyone not to have an attorney review their handbook and recommend compliance and legal advice.  While lawyer review provides an indispensable compliance check, outsourcing the entire handbook process to an attorney can backfire. Handbooks require intimate knowledge of HR policies, management goals, and corporate culture.  Attorneys are not always in tune with the non-legal side of the employee handbook.

A few words of caution if you are going to engage an attorney to actually author the employee handbook:

  1. Never allow an attorney whose area of practice is anything other than employment law or labor law to even touch your handbook. A real estate attorney or general business attorney, or any other kind of attorney is not going to have the specialized knowledge to get it right. 
  2. Do not allow an attorney to take the job unless they agree in writing that they will not simply use a template that they didn’t write in the first place. You may be paying a premium for an attorney to simply edit a bargain basement document.
  3. Only hire an attorney who practices law in your jurisdiction (state/local) and knows the laws there. I personally reviewed a handbook by an attorney whom the CEO of my client touted as “one of the top law firms in the nation.”  That may have been true, but the attorney who wrote the document didn’t know about a major requirement in New Jersey that is as important as any other aspect and as basic as a junior HR Generalist in the state would know.  When I called him on it, he simply said, “well that is a state specific requirement. You can’t expect us to know that.”  I thought: Oh really? Because that is exactly what the client (and any client should have) expected.
  4. Explicitly tell the authoring attorney that you want to avoid employee-unfriendly or hard to understand language.

External attorneys may insert dense legalese disconnected from your company voice. Lawyers also lack context about daily policies, norms, and operations.  In-house counsel may have a different take. Just make sure your in-House counsel didn’t specialize in tax law or something.

Rather than hand the reins completely over to a third party, start with your management team and have then spearhead creating an outline of policies they would like to see, and then draft mission and vision statements aligned to company values. Combined with legal review, this produces a handbook that’s culturally fit and legally vetted.

Establish Clear Employment Policies

Vague, ambiguous language is a major handbook pitfall. Without clear direction, employees operate in a constant gray area leading to confusion and inconsistencies.  It is not fair to your management team either who have to be the sentries of company perimeters and parameters.  Give them the tools to create clear expectations while staying compliant and consistent across departments.

Effective handbooks outline all policies, procedures, expectations, and rights in specific detail. The art of handbook authoring comes in to play when aiming to add that necessary detail while keeping enough slack in all the right places so as not to hamstring company management and ownership,  For example:

Unclear: Employees may take leave if eligible.

Clear: Employees may take up to 12 weeks of unpaid FMLA leave for certified family and medical leaves after 12 months of continuous employment and having worked at least 1250 hours in the previous 12 months.

Unclear: Overtime pay is provided over forty hours of work. 

Clear: Non-exempt employees are paid time-and-a-half (1.5 x regular pay) for any hours worked over forty in a 7 day pay period.

Unclear: Raises and promotions are based on performance.

Clear: Discretionary annual merit raises up to a limit of 5% based on manager review may be available. Promotions are at management’s discretion and are based on set criteria.

Explicit policies reduce misunderstandings about rules and expectations. They also make discipline more straightforward.  When policies are clear, expectations are clear.  When policies are clear, prohibitions are clear.  When an employee violates a published policy, especially one for which they signed a statement saying that they read it, understood it, and will abide by it… it is provable and there are no excuses or ambiguities behind which to hide.

But what about that art of balancing rules with not binding the company?  Here are a couple examples of that as well:

Dangerously Narrow: Employees who are tardy to work three times will be terminated.

Clear and discretionary: Employees who accrue three unexcused tardies within a rolling three month period may receive discipline up to and including termination.

Dangerously Narrow: New hires who complete 90 days of probation will become permanent employees.

Clear and discretionary: Your first 90 days with the company will be a time of evaluation known as the introductory period. New hires must demonstrate success in any new position within the introductory period.  Completing the introductory period does not guarantee continued employment.

Don’t put the company or a manager in a bad place where their options are removed by creating policies that are too specific or too strict.

Preventing Policy Abuse

Well-defined and well balanced handbook policies also prevent employees from exploiting gray areas in company rules.  For instance, let’s look at FMLA leave abuse:

  • Calling out for FMLA leave frequently on Mondays/Fridays
  • Using leave for unauthorized reasons
  • Failing to provide proper medical documentation
  • Exceeding the amount of federally protected leave time

The FMLA has many levers that employers can pull to optimize the policies for their work environment.  One example is the 12-month year in which leave is tracked.  You can make it a rolling calendar, a calendar year, or a fixed year defined by the company. Choose wisely and be consistent.

Further, implement clear processes employees must follow to take FMLA time off. Set realistic requirements for advanced notice of leave within the built-in allowance of the law. And require a set periodic recertification of health conditions. 

In this FMLA example, with clear leave procedures in your handbook, abusing privileges becomes potential grounds for denial of protected leave, discipline, or even termination. Employees can now understand the rules, and your managers can enforce them consistently. 

Similarly, take some time and look at your PTO practices.  This is one place where a tricky balance of incentives, strict rules, and clear procedures is hard fought.  A bad paid time off policy risks everything from poor morale to poor health, to high turnover.  An in-depth analysis of current issues and potential pitfalls is a necessity.  A good starting block is what do you want the time off policy to incentivize (ex: coming to work sick to bank time) or eliminate (ex: employees taking all their time the last month of the year just to use it up before losing it).    

Bottomline: clear and explicit handbook policies that are well thought out will benefit both employers and employees. Workers understand expectations, and companies can operate confidently knowing policies are compliant and enforceable.

The Case for an Experienced HR Consultant

Hey.  I’m an HR Consultant with almost 30 years of experience in handbook creation.  I may be biased. I'm also right, and here is my take…

While an attorney should always review your final draft, partnering with an expert HR consultant from the start is the best way to create a comprehensive, compliant handbook perfectly aligned to your culture.  You are going to get tons of insight from real world experience, and it is going to be super-specific to you company and your unique environment.

Find an HR consultant who knows policy inside and out.  Don’t just choose a consultant because she worked for a big company or because they are cheaper than an attorney.  The right HR consultant will bring decades of experience designing legally sound handbooks for organizations of all sizes and industries. Someone who stays up to date on ever-evolving state and federal employment laws will be able to prove it easily in a discovery call.  And that kind of expert is going to craft custom policies that reduce risk and reflect management goals.

Rather than force fitting scattered templates, HR experts custom build handbooks from the ground up focused on your organization’s specific needs and voice. They can also provide ongoing updates and training as policies require modification. 

For end-to-end support creating an engaging handbook that protects your interests, explore services from leading HR consultants like me.  You don’t have to use us, but for a good example, check My Virtual HR Director at  Our team has unparalleled expertise facilitating the entire handbook process from start to finish.

Equipping your workforce with an excellent handbook drives engagement, productivity, and success. Follow the recommendations in this guide for crafting clear, legally sound policies that will set your organization up for ongoing success.