The Essentials of an Employee Handbook
Updated: Aug 7, 2020
An employee handbook outlines the business’ expectations and benefits to employees. Although not legally required, an employee handbook can be a powerful tool in building employee loyalty and morale, including:
The ability to introduce and formally welcome new employees to an organization.
The ability to have all the various employment policies in one place which ensures that every employee sees each policy.
Handbooks and signed acknowledgments may be useful in defending a company against an employee lawsuit.
However, the benefit can be outweighed by the risks it may inadvertently create. Creating or updating an employee handbook can be overwhelming with employment laws at the Federal, state, and even local levels. This article is intended to be a checklist for Illinois employers in evaluating their handbooks.
Except in the cases where employees certain contractual rights, all employment is by default presumed to be “at-will,” which means an employee can be terminated at any time for almost any reason, with or without an explanation or warning. However, it is possible that an employee handbook contains language that may be construed as a promise on the part of the employer to offer certain employee rights beyond the at-will employment. Thus, Illinois employers should be especially careful in considering what is included in their handbooks because handbook provisions can be considered to be contractual obligations with the employee.
In addition, laws may vary depending on the size of your company, the county and state in which your employees and headquarters are located (this can be complicated if employees are working remotely), and whether your workforce involves unions. Therefore, it is advisable that an employer consults an attorney before finalizing their employee handbook to ensure legal compliance and to minimize potential liability.
Religious organizations, in particular, may need additional policies (such as a Statement of Faith) and should consider tailored legal advice that would be based on the specific organization’s mission and beliefs.
Illinois law requires employers to post certain following notices in the workplace (see the Illinois Department of Labor’s website). Although employee handbooks are not legally required, if they do exist, it is required in Illinois that they contain the following notices:
Pregnancy and Your Rights in the Workplace — Illinois law requires employee handbooks to include a statement of pregnant employees’ rights under the Illinois Human Rights Act, in addition to posting a notice in the workplace. See here for more information.
Right to be free from job discrimination and sexual harassment — Illinois law also requires a statement be included in employee handbooks regarding the right to be free from sexual harassment or unlawful discrimination. See here for more information.
The following disclaimers can be useful to protect employees from potential employment lawsuits:
An At-Will Employment Disclaimer — This disclaimer should make clear to the employees that they are at-will employees and that they can be terminated for any lawful reason. The disclaimer should also state that the provisions of the handbook do not create a contract of employment.
A Right to Modify the Handbook Disclaimer —The handbook should clearly state that employers can revise, rescind, or modify any aspect of the handbook without notice. (Note: Illinois courts often look with disfavor when an employer changes policies unilaterally. Therefore, in practice, if employers need to revise or modify, proper steps should be taken, which is beyond the scope of this checklist.)
An Employee Acknowledgment Form —At the end of the handbook, an acknowledgment form should be included for employers to sign and return to the employer to be kept on file. The form should include statements that the employee received, read, understood, and agree to comply with the handbook. The form should also have an acknowledgement that the employees understand and agree that they are at-will employees.
While not legally required, it is generally advisable for employers to include the following policies in their handbooks:
Equal Employment Opportunity Statement – It is important to ensure the Equal Employment Opportunity, anti-harassment, and anti-retaliation policies comply with the applicable provisions of Title VII of the Civil Rights Act and the Illinois Human Rights Act. This includes making sure all of the specified protected classes are covered (race, color, religion, sex, sexual orientation, etc.). Cities and counties like Chicago and Cook County have additional protected class statuses such as credit history and parental status.
Religious organizations are generally exempted from complying with discrimination laws pertaining to religion, as Title VII and Illinois Human Rights Act allows religious organizations the right to impose religious litmus tests on their employees. Religious organizations also have strong protections in selecting employees for ministerial roles. Nevertheless, churches and ministries who are concerned about discrimination lawsuits should consult an attorney and carefully evaluate their organizational documents, statements of faith, and employment practices to ensure their statuses as religious organizations.
A policy stating the employer’s commitment to an interactive process
A policy stating the employer’s compliance with the Immigration Reform and Control Act of 1986 — This should include a requirement that employees have a Form I-9.
Wage and hour policies — Employers should pay special attention in designating which employees are exempt or nonexempt from Federal and state overtime laws. Also, whether their employees are full-time and part-time which may cause the employees to be entitled to receive certain benefits. Employers should also review state and local laws to ensure compliance in the following categories:
Meal and rest periods
Employee leave policies
Federal law requires specific types of employee leave, including:
Family and medical leave
Leave for federal jury duty
State and local laws may have specific leave requirements, including:
Vacation leave (must comply with Illinois laws regarding vesting, forfeiture, maximum caps, and so on)
Military family leave
Jury duty leave
Victims of domestic violence leave
Organ and bone marrow donor leave
Blood donation leave
Progressive discipline policy – Handbook descriptions of any discipline policy should not be overly detailed or rigid, and should mention that discipline procedures are not mandatory.
Description of employee benefits – The descriptions of the benefits should be clear and concise so as not to create any misunderstanding. It should also include a disclaimer that employee benefits are subject to change or modification. This is because employers have the right to change benefits. In practice, changing benefits should do so with adequate notice to the employees.
Confidentiality of business records and information – These clauses prohibit the employee from disclosing company confidential and proprietary information like customer lists, investor information, and trade secrets.
Confidentiality and Proprietary Rights Agreement – These agreements ensure that intellectual property and other proprietary rights created by employees during the course of their employment are assigned to the employer.
Use of employer-provided email, phones, computers, and other equipment
Use of social media
Standards of employee conduct
Limitations on solicitation and distribution of materials in the workplace
This article is for general purposes only and not as legal advice. A tailored review and analysis by an attorney is strongly recommended for any business or organization. As previously noted, it is advisable that an employer consult an attorney before finalizing the employee handbook. You can contact me at 312-332-2400 or firstname.lastname@example.org.