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Benefits of an Employee Handbook

I recently received a call from a potential new client that was going through a lawsuit from an employee they terminated due to attendance. They had questions regarding the reasons they terminated the employee. One of the first questions I asked them was “what does your employee handbook say about attendance?” They informed me they didn’t have an Employee Handbook because they only had 3 employees - my heart sank…

This is an all too common occurrence with small companies. Many think they don’t need an Employee Handbook due to their size or other reasons. Companies are not legally required to provide an Employee Handbook. However, state and federal laws require you to provide employees information about paid time off (PTO), sick leave policies, workplace rights, and protections.

California has extensive and complicated labor laws that an employer is responsible for; and an Employee Handbook can assist to ensure that your company is compliant with these requirements and consistently applies California Labor Law.

As your company grows and the laws change each year, it is important that your current and future employees have an understanding of your company policies, and that you communicate to each employee these policies and their rights. As you may know, California has the reputation of being a very litigious state. Each year we see more and more lawsuits against employers, whether the facts are true or not. By having an up to date Employee Handbook, businesses are provided a level of protection against potential litigation. Of course, a Handbook is a first level of defense, as long as you follow your own polices (and make policies you can follow). Making exceptions to established policies does increase risk for an employer.

What are the advantages of having an Employee Handbook?

  • Employers fulfill legal requirements for notifying employees about required legal policies regarding workplace rights.

  • Creates a formalized policy that contributes to consistent application, interpretation, and enforcement of all company practices and procedures.

  • Provides an employee with clearly defined guidelines regarding their employment, the employer’s expectation, and their rights as an employee.

  • Assists employers in a proper and compliant onboarding process for new hires.

  • Promotes open communication and transparency by providing an employee with point of contact for issues relating to their employment, rights, and work environment.

  • Helps an employer comply with state employment laws which can be a beneficial legal defense against an employee lawsuit.

An employee handbook can be one of the most effective ways to communicate with employees. Make sure you draft yours carefully and review your employee handbook regularly to ensure it stays current with developments in federal, state, and local laws as well as best practices. I also recommend updating it each year.

If you have questions about this information, need an employee handbook template, or for us to develop and customize one for you, please do not hesitate to contact me at

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