Employee Handbook Revision Season Is Here

With numerous state employment laws about to take effect Jan. 1, many employers are revising their employee handbooks. HR professionals are considering if they want to take a bare-bones approach, offer a lengthy handbook, or do something in the middle.

Chelsea Mesa, an attorney with Seyfarth in San Francisco, prefers somewhere in the middle. Handbooks do not need to be exhaustive because few laws require employers to have workplace policies, she noted. But these documents can be “a good shield and sword,” she said, plus they are a useful way to highlight policy changes.

Compliance Checklist

According to Joe Quinn, an attorney with Cozen O’Connor in Pittsburgh, an employer’s compliance checklist for handbook revision should include:

• Disclaimer language stipulating that the handbook is not an employment contract or guarantee of any benefit and that the employer has the right to amend the handbook without prior notice.
• Clear at-will employment language, if applicable.
• A thorough but general equal employment opportunity provision and a process for appeal.
• A process to follow for an employee seeking accommodations for a disability or some other protected status.
• A clear anti-harassment statement and a process for making a harassment claim.
• A description of the employer’s method of implementing Family and Medical Leave Act rights, including definitions.
• Identification of eligibility and duration of various leaves of absence.
• An outline of eligibility for vacations and holidays.
• A clear process for employees to advance in the organization. 
• Clear descriptions of payroll practices, including overtime, premium pay, and increases.
• A clear description of time-keeping practices, particularly the employees’ responsibilities.
• A clear description of welfare and retirement benefits, including eligibility and reference to plan documents, as appropriate.
• Identification of clear and defensible work rules.
• A clear process for resolving disputes.

Federal Issues to Track

Employers should “keep the handbook current with the employer’s practices and the ever-changing legal landscape,” Quinn said. 

For example, Pregnant Workers Fairness Act (PWFA) regulations took effect in 2024. References in the handbook to the interactive process (discussions between the employer and employee about accommodations) or the requesting of accommodations should be reviewed to ensure that they include the PWFA, Quinn said.

Another item in the handbook that may need to be updated is noncompete agreement language. The Federal Trade Commission’s attempt to limit noncompete agreements was not successful, but “various state legislatures, on the other hand, have stepped in,” Quinn said. Accordingly, employers that wish to address noncompete agreements in a handbook should ensure that the state laws where their employees are located will allow such restrictions.

Codes of conduct and work rules “are subject to the political winds of any given year,” he said. 

The effect of the National Labor Relations Board’s ruling last year in Stericycle lingers. In that decision, the board set out a standard that it will determine whether work rules are unlawful by assessing a policy from the perspective of an employee. If the employee could reasonably interpret the rule to restrict worker activity that is protected by the act, the employer has the burden of showing that the rule advances a legitimate and substantial business interest.

“The effect of Stericycle is that employers should routinely audit their codes of conduct and their work rules that are posted or included in a handbook to determine if change is needed,” Quinn said.

Daniel Jacobs, an attorney with Jackson Lewis in New York City, said that National Labor Relations Act concerns are “somewhat less critical with the next administration and anticipated reversion to old standards.” But Jacobs said handbooks should be reviewed at least annually, nonetheless.

State and Local Trends

Handbooks should also be reviewed to account for developments in state and local requirements in the locations of an employer’s workplace, Quinn said. 

If an employer has remote employees, it should review where employees work and whether the employer should have addendums to their handbook for the states where benefits or requirements are different, said Debbie Petito, an attorney with Offit Kurman in Los Angeles. Alternatively, an employer might indicate that it follows the law of the state where the employee is working. 

Recent trends in some states include:

• The enactment of pay transparency laws.
• State and local minimum wage increases.
• The legalization of marijuana use for recreational or medical purposes.
• The adoption of regulations on artificial intelligence in the workplace.
• Paid-sick-leave laws and personal-leave laws.

“Marijuana legalization can impact drug/alcohol policies, especially those with broad restrictions impacting employees outside of work,” Jacobs said.

Many employers find it burdensome to conduct marijuana testing, particularly prehire marijuana testing, according to Nancy Delogu, an attorney with Littler in Washington, D.C. However, employers in manufacturing, health care, transportation, warehousing, and other sectors that require driving or other safety-critical work are more likely to bar off-work use of marijuana and to test for that use, she said.

States often amend sick-leave requirements, but sometimes employers overlook the changes, Petito said.

Handbooks should be updated to adequately describe how paid sick time is accrued, where it is required, how it can be used, how much can be banked, and whether unused banked time must be paid out, Quinn said.

A significant change in a company’s staffing levels could also require changes to the handbook. “Employers should also look at the size of their employee population to determine if they are now covered by current laws because they grew in size or maybe they are no longer covered because their employee population has decreased,” Petito said.

HR also should remember that while some states follow the Fair Labor Standards Act, others—such as California—have their own requirements for exempt employees, she added. 

“There also has been increasing litigation about confidentiality and nondisparagement and the requirement that employees be free to file a complaint about sexual harassment and abuse,” Petito said.

A Well-Publicized Policy Is an Effective One

Even if a handbook does not need to be updated, an employer should consider whether there are any policies that should be circulated and for which employees should acknowledge receipt, Petito said. 

For example, a well-publicized policy against workplace harassment continues to be the greatest legal safe haven against liability for an employee’s harassment, Quinn said. 

Many employers annually reissue their policies on harassment and discrimination and require employees to acknowledge they have received and read them. 

Similarly, “in California, employers may want to reissue their meal and rest break policies because so much litigation alleges that employees did not take meal and rest breaks,” Petito said.