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The Employee Handbook: A Business Management Tool

Legal Minute written by Teresa Schiller, Attorney, published in the 2019 first quarter edition of Greater Waco Business magazine.

Waco businesses employ a sizeable workforce – our economy has more than 56,000 employees. During 2016 and 2017, Waco’s employment rate exceeded the national unemployment rate, meaning that the amount of unused human resources is relatively low. What can businesses do to manage these human resources effectively? One tool that may be useful is the employee handbook.

An employee handbook can benefit a business in several ways:

  • Improve employee morale due to predictability
  • Communicate values and strategies for employee and customer relationships
  • Guide managers and other leaders’ decision-making
  • Reduce the risk that informal practices become formal policies
  • Help defend the legality of employment actions

Along with these benefits come certain responsibilities. For example, a business should be sure that its handbook policies are lawful and that it agrees with and is prepared to enforce the policies fully and consistently. Although there is no “one size fits all” handbook, here are some general guidelines.

1. Describe the nature of employment, as well as discipline and termination.

A handbook should state that the nature of employment generally is “at will,” and that the employer may terminate employment with or without notice, and with or without cause. It should describe employment categories – full-time, part-time, and/or temporary employment – and the distinctive nature of an independent contractor relationship. Any probationary period for new employees should be explained. The handbook also should outline a performance review process. It should identify possible disciplinary actions and alert employees that investigations and searches may be conducted. The handbook also can describe any grievance or dispute resolution process. Finally, it should provide information about termination of employment – both voluntary and involuntary.

2. Demonstrate the business’s commitment to complying with the law.

A handbook should reflect compliance with the law. A business needs to be knowledgeable about applicable legal requirements based on factors such as location and industry. Certain laws also apply based on the number of employees a business has. And, of course, laws change from time to time. In general, a business’s compliance with the following may need to be covered in a handbook: (1) equal employment opportunity; (2) anti-discrimination/harassment/retaliation; (3) wage-and-hour law compliance; (4) safety; (5) privacy and confidentiality; (6) protected leave; and (7) verification of employees’ immigration status. Employees should understand after reading the handbook what is and is not allowed and how to report a problem to management.

3. Describe workday procedures and standards of conduct.

Every business has daily operating procedures and expectations about employee conduct. A handbook can help communicate this information. Basics – such as business hours, work schedules, mealtimes, and breaks – can be stated. Conduct-related issues such as the following also can be covered: (1) fitness for duty; (2) attendance and punctuality; (3) personal appearance; (4) courtesy and respect; (5) use of technology; and (6) examples of unacceptable conduct.

4. Cover employee pay and benefits.

A handbook should describe what a business provides to an employee in exchange for his or her service. For example, the pay schedule, method of payment and deductions from pay should be covered. Applicable salary classifications – exempt and/or non-exempt – should be described, along with related overtime and timekeeping requirements. Any benefit available to employees, such as paid time off, should be explained in a way that makes it clear when, or if, an employee is eligible.

5. Require employees to sign acknowledgments.

A handbook should include an acknowledgment page for each employee to sign and return following training or time for review. The acknowledgement should state, at a minimum, that the employee has received the handbook, reviewed it, and agrees to comply with it. The acknowledgement also could include provisions relating, for example, to garnishment and return of property.

6. Review the handbook periodically.

Business leaders should review the handbook periodically to determine whether it should be updated and redistributed to employees. Are the provisions in the handbook consistent with existing business practices? Are additional policies or clarifications needed? Are there any updates in the law that should be incorporated? The more frequently a handbook is reviewed and updated, the less effort is needed each time.

In sum, a handbook literally can help a business to ensure that its employees are “on the same page.” With a handbook in place, business leaders may be able to spend less time answering employees’ questions and resolving disputes, and more time focusing on profitability, productivity, and other day-to-day challenges.



Teresa Schiller is a business and employment lawyer at Beard Kultgen Brophy Bostwick & Dickson, PLLC in Waco and Dallas. She assists clients with employee handbooks. Teresa can be reached at