Top Ten Policies Every Employee Handbook Should Have

A well-formatted and carefully written Employee Handbook is the cornerstone of every harmonious and efficient workplace. Employee Handbooks are a helpful, informative tool for both employees and employers. Employee Handbooks outline a variety of workplace policies, notices, and resources for employees to consult and abide by. While many of these policies and notices can be formulated entirely at an employer’s discretion, policies must abide by state and federal law. Having precise, written policies helps prevent employer-employee disputes in the future and avoid confusion among employees. Here are some policies that every Employee Handbook should include:

1. Employee Classification and Relationship

In California, workers are presumed to be “at-will” employees, meaning that an employer or employee may terminate the employment relationship at any time, with or without cause. Workers may be classified as either “exempt” (i.e., salaried and not entitled to overtime pay), or “non-exempt” (i.e., paid by the hour and entitled to overtime pay). It is important for your Employee Handbook to include this policy and explain these definitions for employees.

If your company plans on hiring or classifying workers as independent contractors, it’s important to correctly determine whether such workers may be classified as independent contractors. For example, depending on the type of work that is to be performed, employers may use the ‘ABC Test’ to determine whether you are correctly classifying these workers.

Ensuring that workers are properly classified as either exempt employees, non-exempt employees, or independent contractors is critical.

2. Compensation

It is important to outline minimum wage, overtime pay, and meal and rest period requirements. Whether your employees are salaried or paid on an hourly basis, the Employee Handbook should detail how employees are paid, and when employees are paid. For non-exempt employees, the Employee Handbook must also outline overtime policies. In California, non-exempt employees are entitled to 1.5-times the employee’s regular rate for all hours worked in excess of 8 hours up to and including 12 hours in a workday, and for the first 8 hours worked on the seventh consecutive day of work in a workweek. Similarly, employees are entitled to double their regular rate for all hours worked in excess of 12 hours in a workday, and for all hours worked in excess of 8 hours on the seventh consecutive day of work in a workweek.

3. Timekeeping

Non-exempt employees must accurately record all hours worked, otherwise employers could incur penalties. As with the above policy, it is generally prudent to require employees accurately record all time worked and verify they have taken their mandatory meal periods. An effective handbook policy for timekeeping will explain in detail the procedure for employees to record all hours worked (e.g. with paper forms or via timekeeping software, etc.), and adverse actions for failing to do so.

4. Leaves of Absence

Employees are entitled to statutory paid or unpaid leaves of absence, including, but not limited to, the Family and Medical Leave Act (FMLA), the California Family Rights Act (CFRA), and Americans with Disabilities Act (ADA). It is important to include the types of leave required under these acts in the Employee Handbook, as applicable; Employee Handbooks should especially note how long an employee may take leave, policies for requesting and verifying the need for leave, and whether such leave is compensated.

Additionally, an Employee Handbook should include a paid sick leave policy. In California, employers must provide at least twenty-four hours of paid sick leave by an employee’s 120th calendar day of employment, and forty hours by the 200th day of employment. Employees must also be able to accrue up to eighty hours of paid sick leave. The paid sick leave policy should detail the accrual rate, or whether the paid sick leave is front-loaded upon hire. The paid sick leave policy should also detail when employee’s can take sick leave, and for what reasons.

5. Equal Employment Opportunities

It is important to inform employees that the company does not discriminate in its employment practices based upon protected classifications. The Employee Handbook should have a clear policy that outlines Equal Employment Opportunity requirements and provides guidance on who to contact if there are any concerns or complaints.

Employers should also implement training for their managers, supervisors, and employees, based on the Equal Employment Opportunity policy. Employers should also create a process to address and resolve complaints of discrimination and violations of the Equal Employment Opportunity policy.

6. Prohibited Harassment

These policies apply to all persons involved in the operations of the company and extend to protect employees from prohibited harassment by third parties. It is important to inform employees of all kinds of prohibited harassment (e.g., hostile acts against an employee because of their gender) and that harassment based on membership of any protected category or characteristic is prohibited conduct. Similar to the Equal Employment Opportunity policy, an employer also has a duty to investigate reports of harassment and formulate procedures for training employees to actively combat harassment in the workplace, and address and resolve prohibited harassment complaints.

7. Discipline, Conduct, and Security

In addition to harassment policies, every Employee Handbook should list out all forms of prohibited workplace conduct to the degree possible. Likewise, disciplinary policies must be outlined to explain how prohibited conduct policies will be enforced. However, Employee Handbooks should avoid promising progressive discipline policies. Safety and security provisions should also be included, such as an Injury and Illness Prevention Program (IIPP). As of July 1, 2024, employers in California are also required to adopt comprehensive Workplace Violence Prevention Plan (WVPP), including recording requirements for violent incident logs, conduct and injury investigation procedures, and training programs for employees to implement the violence prevention plan.

8. Arbitration Agreements

In order to avoid costly legal proceedings and more effectively resolve employment disputes, employers can include a separate and distinct arbitration agreement as part of the on-boarding process for employees to sign. Employees should separately sign and acknowledge any arbitration agreement. Having the arbitration agreement as a separate document from the Employee Handbook is critical, and helps employers enforce the agreement if the agreement is challenged.

The arbitration agreement must also comply with applicable law, may not enforce more stringent restrictions than litigation (e.g., a shorter statute of limitations), and employers must pay the costs of the arbitration. Further, employers may now include provisions in the arbitration agreement for employees to voluntarily waive any right to class or representative action.

9. Privacy

Employees have the right to request to inspect, copy, correct, or delete portions of their employee records upon written notice to their employer. Employers are required to keep such records for no less than three years after termination. Employers may also create substance testing policies as a condition of employment, provided such tests are administered consistent with applicable law. Employees should also be notified of the employer’s right to search company property and that the use of company-owned or operated devices and electronic communications may be monitored by the company at the company’s discretion, including during remote work. Under a variety of consumer protection laws like the California Privacy Rights Act (CPRA), employers may also have obligations with regards to employee data and should ensure that proper notices are given to employees.

10. Remote Work

The Employee Handbook should outline a remote work policy. As part of the policy, employees should be notified that they will be compensated for all necessary expenses required to perform their work duties at home, including home internet and phone services. Employers offering remote work options must modify their paid sick leave policies to entitle remote employees to use sick days as normal. Certain other aspects of the Employee Handbook must be tailored to provide guidance for remote employees, including equipment and technology use policies, company property security policies, worksite and online safety policies, and timekeeping policies.

Conclusion

Employee Handbooks are a critical resource for both employers and employees and help create a better informed and trained workforce. Still, there are rapidly changing, complex state and federal laws which require caution on behalf of employers and diligence in updating these handbooks to reflect such changes. The experienced attorneys at Palmer Kazanjian Wohl Hodson stand ready to guide you through these rules and regulations and to assist in drafting an Employee Handbook that meets your company’s needs.

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The fee for preparing the customized employment policy handbook and conducting the initial internal labor audit commences with five hours at a discounted hourly rate. Generally, our attorneys complete the handbook preparation and initial audit within the discounted five hours. Any legal consultation, beyond the initial five hours is provided at our standard rates. You are notified when the discounted hours are exhausted. Multi-state handbook preparation is also available. Please contact us at 916.442.3552 today to get the process started.

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