No federal law requires a private employer to have an employee handbook. But once you have employees, you're expected to communicate a surprising number of policies, and a handbook is the most practical place to do it.

A good handbook sets clear expectations, supports consistent decisions, and shows you take your legal obligations seriously. A poorly written one can do the opposite, making promises you never meant to make or setting rules that conflict with federal labor law.

What to include

Equal employment and anti-harassment policies

Every handbook should state your commitment to equal employment opportunity and prohibit harassment, discrimination, and retaliation. Just as important, it should explain how an employee reports a concern, with more than one person or channel to report to, and make clear that retaliation for reporting is prohibited.

California requires employers with five or more employees to have a written harassment, discrimination, and retaliation prevention policy, and to provide harassment prevention training to supervisors and nonsupervisory staff.

An at-will statement

In most states, employment is at-will: either side can end the relationship at any time, for any lawful reason. Your handbook should say so clearly, and should state that nothing in it creates a contract of employment.

Pay practices

Explain your pay schedule, how hours are recorded, how overtime works, and how employees can raise a pay concern. If you require approval before working overtime, say so, but know that you still have to pay for overtime that's worked without approval. You can address that as a performance issue.

Include meal and rest break rules if your state has them, since the requirements vary widely.

Leave policies

Cover vacation or PTO, sick leave, holidays, and any job-protected leave you're required to provide. Many states and cities now require paid sick leave, each with its own accrual and notice rules. Employers covered by the federal Family and Medical Leave Act, generally those with 50 or more employees, must include FMLA information in their handbook if they have one.

Workplace conduct and safety

Attendance, standards of conduct, workplace safety, drug and alcohol rules, technology use, and how discipline works.

An acknowledgment page

Have every employee sign a page confirming they received the handbook and understand they're responsible for reading it. Keep the signed copies, and collect new acknowledgments each time you update the handbook.

What to leave out

Promises you don't mean to make. Language like "employees will only be terminated for cause," or a progressive discipline policy written as a required series of steps, can undercut at-will employment. Describe discipline as something you may use at your discretion.

Probationary periods that imply permanence. Calling the first 90 days "probationary" can suggest that employees who make it through can only be fired for cause. If you use an introductory period, say explicitly that employment stays at-will afterward.

Rules that discourage protected activity. The National Labor Relations Act protects most private sector employees' right to discuss pay and working conditions with each other, whether or not they're in a union. Blanket bans on discussing wages, or overly broad confidentiality, social media, or "no negativity" rules, can violate federal law. The standard the National Labor Relations Board uses to evaluate these rules has changed several times in recent years.

Policies copied from another company. A template from another business, especially one in a different state, often includes policies that don't apply to you and leaves out ones that do.

Policies you don't actually follow. A handbook that says one thing while managers do another becomes evidence against you. Only include what you're prepared to apply consistently.

If you have employees in more than one state

One handbook rarely fits everyone. A common approach is a core handbook plus state-specific supplements covering leave, pay practices, and breaks.

Keep it current

Employment laws change constantly, and many state and local changes take effect on January 1 or July 1. Review your handbook at least once a year, update it when laws change, and redistribute it with a fresh acknowledgment whenever you make a meaningful change.

A handbook written three years ago is probably out of date somewhere. The good news is that a structured review usually finds the gaps quickly.