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There is no law requiring employers to have an employee handbook, but it's a good idea. A handbook lets you inform your employees about your workplace rules in an efficient, uniform way. Your employees will know what is expected of them and what they can expect of you. And you will be able to prove that all employees were aware of the rules if an employee later decides to challenge you in court.
An employee handbook can provide your company with valuable legal protections. For example, an at-will policy can provide a valuable defense against employee claims of breach of contract. The handbook also gives you a good place to collect policies that must be in writing, such as policies on smoking, drug testing, or family and medical leave.
For more suggestions on what to include in an employee handbook, see Nolo's article Why You Should Create an Employee Handbook.