Q.Do I need an employee handbook?
A.California law requires all employers to adopt a written policy prohibiting sexual harassment. While other policies may not be required to be in written form (depending on the size of your company), verbal communication of company policies carries no proof that you made your employees aware of the rules in the first place. This leaves you open to potential legal problems later.
Aside from those policies that must be in written form (e.g. sexual harassment policy for any employer with 1 or more employees), companies typically adopt a mini employee handbook when they grow beyond 10 employees, and a full employee manual when they grow beyond 25. The larger the workforce the greater the need to have the company's personnel policies in written form.
A properly drafted employee manual will inform employees about company policies, practices and procedures, promote employee loyalty, serve as an instruction manual for managers and supervisors, and in turn limit the potential for successful employee lawsuits.
However, this is not a do-it-yourself project. While a well-drafted employee handbook can be an invaluable tool to limit liability, a pro-employee handbook or poorly drafted employee handbook can shift the tide and actually give the employee more rights than the employer expected and in turn increase the employer's potential for liability. Employers are better off not having an employee manual, than having one prepared from a CD-Rom or a form book. The policies articulated in these kinds of products often cause more problems than they solve.
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