What’s Missing from Your Employee Handbook?

Written by Valerie Battles, HR Pro & Consultant


By now, you may be thinking “I have less than five employees, do I really need an employee handbook?” The answer is: there is no state or federal law that requires you to have an employee handbook. However, as an employer with at least one employee, you have a legal responsibility to inform your workers of their rights and responsibilities while clarifying your workplace expectations at the same time.  A thorough employee handbook helps to limit your liability and reduce misunderstandings at work that could lead to costly legal conflicts.

If you’re a small business employer with an employee handbook, great!  You’re already ahead of the game.  Now that you’ve invested in the time and professional resources to create a well-drafted employee handbook, you’ll want to review it regularly for new legal updates to local, state, and federal employment laws.  If you do not have an onsite HR Manager to help ensure your employee handbook is up-to-date, working with an experienced HR Consultant for occasional projects like this might be the best solution to help keep your business in compliance.

So then, what’s missing from my employee handbook you ask? In 2020, nearly 250 new employment laws were implemented across the United States. Since January 1, 2021, more than 80 new employment laws have been implemented across several states from coast to coast. If you do not have the resources to identify any new laws that could affect the way you do business (or not), you may be out of compliance.  In case “you don’t know what you don’t know”, here are a few tips to help you get back on track!

  1. Legal Updates:
  • Review the changes for your state, if any, and arrange to revise, update, or add the policy (or policies) to your employee handbook.  Click here for a list of the new employment laws by state effective 1/1/2021. 
  1. Disclaimers:
  • It cannot be overstated that the Company “reserves the right to change the policy (or policies) in the employee handbook at any time.”
  • You should always put any changes in writing; however, this statement protects your basic right, as the business owner, to make those changes.
  • Every employee handbook must have an at-will employment disclaimer; this means that the employer or the employee may terminate employment at any time, with or without cause or prior notice. The employer’s reason cannot be illegal (i.e., discrimination, retaliation, etc.) and must not violate three major exceptions to the at-will doctrine; public policy, implied contract, and implied covenant of good faith.  It should also be noted in the disclaimer that nothing in the handbook creates an employment contract or alters the employee’s at-will employment relationship.
  • Disciplinary action policies should include a disclaimer that the company reserves the right to skip one or more steps depending on the severity of the offense or conduct.
  • A disclaimer that the employee handbook cannot address every scenario that could potentially arise in the workplace.  This clause gives the employer the flexibility necessary to handle unique situations on a case-by-case basis.
  1. Employee Handbook Acknowledgment and Receipt Statement:
  • An employee handbook acknowledgment and receipt form should be signed by new hires and all employees each time the handbook is updated.  The form is intended to confirm that the employee received the handbook and is responsible for reading and understanding the information contained in the handbook.
  1. Employee Handbook “Must Haves” Including But Not Limited To:
  • Harassment Prevention Policy
  • Drug-Free Workplace
  • Equal Employment Opportunity (EEO) Statement

In summary, an experienced HR or legal professional will undoubtedly use a checklist to create your initial employee handbook.  A checklist includes all of the mandatory policies required by local, state, and federal employment laws. The next steps would include working with you and your management team to add any recommended and optional policies required for employee benefits, internal policies, and employer expectations to your workers.

Wa-lah!  After your approval, the new employee handbook is rolled out to all employees with the expectation that they sign the Acknowledgement and Receipt Statement typically placed at the end of the handbook.  Each year, and annually thereafter, the employee handbook is reviewed by your HR or legal representative for employment law updates.


If you’re looking to hire a new employee in California and don’t know what’s needed, we can help! We have a few resources that you can utilize, we have A Step By Step Guide to Hiring Your First California Employee and New Hire Forms available on our website.

Another good resource to help you is Us! You can reach out to us here.