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Employee Handbook - How to Create an Effective Employee Handbook

No matter how large or small your organization might be, you can derive significant benefit from having a well-crafted employee handbook that spells out your policies. The handbook should include both mandatory policies and any recommended policies applicable to your workforce.

Best Practices

  • Establish and record a set of well-designed workplace policies and include them in an up-to-date employee handbook.

Reasons for Creating an Employee Handbook

You may not realize the need for formal and comprehensive policies and procedures until you encounter an unanticipated problem. Do not wait until you find yourself in a lawsuit! Properly written and communicated policies can help you:

  • Comply with complex federal and state regulations
  • Ensure fair and consistent treatment of employees
  • Avoid misunderstandings that could potentially lead to lawsuits
  • Orient new employees
  • Educate supervisors and managers
  • Establish legal protections

Many small- and medium-size companies find effective workforce management challenging. If your company does not have an experienced personnel administrator, you can especially benefit from written policies.

How to Create an Effective Employee Handbook

To prepare an effective employee handbook, you need to understand your current policies (both written and oral), past practices and anticipated future needs. Remember that your handbook is a legal document and must be updated to meet the ever-changing needs of your company and the laws that govern employment practices.

Employer Right to Change Handbook

California employers have the right to unilaterally change or terminate policies contained in their employee handbooks without having to be concerned about violating an implied contract of employment if they follow certain guidelines.

Mandatory Policies

Certain policies are mandatory and must be included in your employee handbook. For example, California employers must have a written harassment, discrimination and retaliation prevention policy. Including these policies clarifies for employees their rights and obligations, and protects you from potential liability.

Additional Information You Must Provide to Employees

In addition to the mandatory policies, there is certain information that must be communicated to employees. The information may be required in your employee handbook and/or the posters you hang in communal areas. Other information must be given to employees at the time of hire or at certain points during the employment relationship.

Recommended Policies

Some of your organization's policies or benefits may not be required by law, but if you offer them, they may bring legal requirements with them. To protect yourself from misunderstandings and lawsuits, you should communicate certain requirements to your employees.

Staying Out of Trouble

Although an employee handbook is a powerful tool for avoiding litigation by clarifying and publishing your policies, it can lead to potential lawsuits if not done correctly. Be careful that your handbook does not violate any federal or state laws or override the at-will employment relationship.

Related Resources

Employee Handbook Creator

CalChamber's Employee Handbook Creator online tool takes the guesswork out of creating a California employee handbook. Its smart, comprehensive wizard asks a series of questions to help you decide what you want or need in your handbook — to communicate company policies and set expectations.

  • Access the online tool from your desktop or tablet through a yearly subscription (PC/Mac compatible).
  • Select from more than 100 company policies at your fingertips, including policies that may be required, recommended or optional for your company.
  • Print a copy of wizard questions and your answers.
  • Stop and start anytime (progress tracked).
  • Customize handbook with your logo and company-specific content.
  • Add your own custom policies.
  • Copy and paste company-specific text from a previous handbook.
  • Export your completed handbook into PDF, RTF or HTML and then print from your own printer.
  • Revise online as needed and export the new version.
  • Receive required policy updates during your subscription.

Purchase the Employee Handbook Creator separately in English or Spanish. Save $50 when you order both as a kit. Instructions, explanations, navigation and the wizard are in English for both versions.

Watch the Employee Handbook Creator demonstration video


Employee Handbook Creator Questions and Answers

  1. Am I required to have an employee handbook?
    California does not require employers to have a handbook. However, if you create a handbook, there are policies that must be included.

  2. Why doesn't Employee Handbook Creator have English and Spanish languages within the same tool?
    To lower your cost, we offer English and Spanish versions separately so you can subscribe to the version you need. (Instructions, explanations, navigation and the wizard are in English for both versions of Employee Handbook Creator online tool.) Save $50 if subscribe to a kit with both versions.

  3. Why would I need a Spanish version of the handbook?
    California has a large Spanish-speaking workforce, so communicating your policies to employees in a language they understand is important. In some cases, such as anti-harassment policies, the failure to communicate the policy in the language that your employees speak may increase your risk of liability in the event of a lawsuit. An employee handbook gives you the best opportunity to clearly communicate your company policies and help protect yourself from unlawful termination suits.

  4. If I have an existing policy or want to add information to a policy in the online tool, will it translate it into Spanish?
    No. However, if you are a CalChamber member, you're eligible for a free initial consultation and a 15% discount on translation from Localipsum, made available through our Perks & Discounts partner service.

  5. What if I need more than one handbook?
    Within your company you can create as many handbooks as you need. If you would like to add a new handbook for a different company, you will need to buy another subscription. If you need subscriptions for multiple companies, call (800) 331-8877 for a quantity discount.

  6. Can I post it to our intranet?

  7. Can I personalize it with our company logo?

  8. Do you have technical support if I need assistance?