Employee Handbooks: One Size Does Not Fit All

By Donald S. Smith - RBE Partner

Unlike the hat the coach gave you when you played Little League baseball, when it comes to employee handbooks or manuals, one size does not fit all. If your company is going to have an employee handbook—and every employer should—that handbook should be unique to your company. It is acceptable to start with a “cookie cutter” employee handbook that you copied from a form you found on the Internet, but the final product should be tailored to your company’s specific needs and corporate personality.

What makes your handbook unique?

Something that makes your employee handbook unique is a statement from the company owner, president, or CEO welcoming new employees and providing a brief history of the organization. The handbook should then specify workers’ status as at-will employees (if that is the case) and provide that the handbook does not create a contract of employment for a specific duration. It is also a good idea to include a statement establishing that the company is an equal opportunity employer. Such a statement will be cited by the company’s employment lawyer in defense of any discrimination claims that may be presented.

The company’s employment policies should be crafted to match the company’s actual practices. For example, it would seem disingenuous to include a policy against the employment of relatives if the company is a family business that already employs relatives. The employee handbook should also contain policies that are factually accurate. It does no good, for instance, to include the federal and state requirements for certain employers to provide accommodations to nursing mothers when in fact no such accommodations are made. Another important consideration is that the policies in the handbook should be relevant to that employer. For example, the handbook may contain a policy implementing the requirements of the Family and Medical Leave Act (“FMLA”) (such as providing for 12 weeks of leave and job protection upon return). However, that law only applies to employers of 50 or more employees. If your company has fewer employees, you may implement an FMLA policy, but you are not required to do so by law. On the other hand, if you have more than 50 employees, an appropriate FMLA policy should be included in the employee handbook.

Another policy that should be included in your employee handbook is the company’s policy on vacations and/or paid time off (“PTO”). An important component of such a policy is whether the company will pay for accrued but unused vacation or PTO upon termination of employment. The general rule in Indiana is that an employer must pay accrued but unused vacation time upon termination of employment unless it has a written policy to the contrary. Nothing upsets a company owner more than not paying accrued but unused vacation time to an employee who was terminated for misconduct who then files a claim with the Indiana Department of Labor seeking accrued but unused vacation pay, only to learn that the company did not have a written policy that provided that no such pay is due. Having such a written policy alone will more than compensate the company for the cost of having its employee handbook reviewed for compliance with the law.

Another recommended policy that will prove useful is a set of work rules. Violation of those work rules will be cited when disputing unemployment compensation claims. The company has a much greater percentage of winning a disputed unemployment claim when the employer can show a specific rule was violated by the employee that led to the employee’s termination and that the employee was aware of the policy because it was included in the handbook.

What are you waiting for?

If your company does not have an employee handbook, you should start by gathering samples of policies to determine what makes sense for your organization. This task often gets put off when more pressing needs, such as sales and operations, take precedence. The same is true when a company has an outdated employee handbook. Employment laws change frequently, so your existing handbook should be reviewed every couple of years to make sure your policies are current. Such a review will not be expensive—or at least not as expensive as enforcing a policy that is no longer “legal.”

Instead of delaying any longer, provide what you have to your employment lawyer to review so he or she can tailor the employee policies to your company’s unique needs and make sure they comply with current laws. Doing so will get the project moving and will result in your company having an employee handbook that is informative, accurate, and useful.

For questions about employee handbooks or other employment law issues, please contact a member of the RBE team.

Donald S. Smith

Donald S. Smith


Donald S. Smith – Attorney at Law

Donald Smith limits his practice to representing employers and executives in labor and employment matters. He defends employers in cases pending before state and federal courts, the National Labor Relations Board, Equal Employment Opportunity Commission, Indiana Civil Rights Commission, U. S. Dept. of Labor, OSHA, IOSHA, Indiana Dept. of Workforce Development, and Indiana Worker’s Compensation Board. Don advises employers concerning various employment issues such as employee handbooks, employment agreements, severance agreements, covenants not to compete, restrictive covenants, wrongful termination, collective bargaining, labor arbitration, unions, discrimination, harassment, wage and hour matters, unemployment compensation and worker’s compensation.

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Posted on March 29, 2022, by Donald S. Smith