By AJ Esral, Esq.

Handbooks.

If you’ve ever worked for a company, chances are you’ve been handed one of these. They can run from a few pages to several hundred, often contain inexplicable passages of dense legalese, and are generally skimmed through briefly before being relegated to a drawer somewhere.

What’s the point? It’s now 2026; is it time we finally drop this trend?

No.

Handbooks serve several important functions, both for employers and employees, by:

• setting clear expectations, and
• limiting legal liability

… if they’re done right.

There are plenty of ways to do it wrong and cause more harm than good.

Poorly prepared handbooks typically are boilerplate documents that don’t say much and are difficult to understand.  As a result, they don’t accomplish either of the above purposes. Indeed, they sometimes end up shooting the employer in the foot.

In the hope of avoiding that problem for you, I’ll provide a few tips for how to draft a handbook so it’s actually useful to both employers and employees.

Let’s get into it.

Setting Expectations

Every company is its own microcosm.

A hierarchy of important people, rules and rituals make the place run, and an implicit culture underlies the whole enterprise. As with any system, there is a learning curve for newcomers, and it doesn’t always come across quite right to ask all sorts of questions on the first day. What are the company’s preferred methods of communication? What can/should you wear? How is performance measured? How does PTO work? And so on.

As an employer, this is your opportunity to tell your new employees everything they will inevitably ask you. Think about things such as:

• PTO: How and when to take leave, and PTO vs. unpaid leave.
• Payday: How payday works, what deductions are taken.
• Reporting channels: Who to go to with complaints or reports of harassment.

Importantly, this is also your opportunity to tout the many benefits employees enjoy. If you provide life insurance, health benefits, and the like, you want to tell employees about their “hidden paycheck.” Many do not know that the employer pays into Social Security on their behalf, too. Claim credit for the money the employer pays to provide worker’s compensation coverage, and other benefits at no cost to the employee.

This is also an opportunity to set expectations.  It is easier to compile a list of policies in advance than tell everyone on the fly, such as:

• Attendance and how to report absences;
• Any disciplinary frameworks; and
• Workplace conduct expectations, including behavior, dress code, and safety protocols.

Bottom line: It’s much easier to reaffirm this information in a handbook in case it gets lost during the hustle and bustle of onboarding. The handbook serves as a kind of catch-all for anything you may have forgotten, and it can be referenced later as needed.

But that’s not the only purpose of handbooks. 

Limiting Liability

“Please provide a copy of your handbook with the relevant policy or policies highlighted.”

That is the first thing they ask for in most employment-related lawsuits or EEOC complaints. And for good reason: that’s the first (and often, only) place where the purportedly violated policy lives. This is why you often find policies about hiring in handbooks – topics like equal employment opportunity, background checks, and immigration compliance — even though by the time an employee gets it, chances are they’ve already been hired. It’s because those policies need to live somewhere. A company needs to have on record that it does things by the book; where else, other than in required legal postings, is the company going to put it?

But there are lots of other good liability-related reasons an employer might want a handbook:

• No term contracts. It minimizes “implied contract” or “term contract” risks by stating in BIG, BOLD LETTERS up front that nothing in this handbook creates a term contract, and employment remains strictly at will.
• Discipline. It provides an express basis for discipline, which can help an employer convey to the employee that the action is not personal. “Sorry, but this is our policy.”
• Clear policies. It forces employers to think through and articulate how they want to run their company, which works to everyone’s benefit.  Most of the time, having established rules is better than making decisions – and creating policies – as issues arise.

Obviously, to reap the benefits of a well-drafted handbook, you have to make sure each employee receives a copy of it. Many companies believe it is crucial to have an Employee Acknowledgment page that employees must sign to prove they received it.  We believe that a signature page often creates more problems than it solves.  What happens, for example, when an employee makes a complaint and you go looking for that employee’s signature page . . . but it is nowhere to be found?  If it is your policy that ALL employees MUST sign for their handbook, then the missing signature page is likely to become a point in favor of the employee.  “Hey, I never even saw the handbook!  Do you have a signature page that proves I did?”

But how can you prove that your employees received the handbook if you don’t have a signature page?  The good news is that any record of distribution or evidence of your policy of distribution will do:

• a dated email to the employee,
• an electronic date stamp of distribution, or
• a new employee checklist that clearly states company policy to distribute the handbook and any subsequent changes or updates (even without proof that the handbook actually was distributed to the particular employee).

Any of these create a rebuttable presumption in favor of the employer.

We have discussed some of the important benefits of having a well-drafted handbook.  What are some of the hidden dangers that can be created by a poorly-drafted handbook?

What to Look Out For

Drafting mistakes include both the risk of forgetting to include certain policies, as well as including certain policies without realizing they are unlawful.   

A common example of the first category includes employers who forget to put a cap on carryover rates for PTO or to include a policy that accrued but unused leave is not paid out upon termination.  If an employer wants that to be the company’s policy, Maryland law requires that it must be in writing.  Companies who don’t put it in writing often have to pay out hundreds of accumulated hours when an employee quits.

A common example of the second category includes employers who boldly state in their handbooks that all employees who receive a salary are exempt from overtime – when, in fact, the law provides that paying a salary does not (by itself) mean an employee is exempt.  When a salaried employee should have been paid overtime, the first thing the employee’s lawsuit points to will be the company’s bold (and incorrectly drafted) handbook provision.

Another caveat: you need to make every effort to actually follow the policies as they are drafted, or else redraft them. It sounds obvious, but this is probably the number one reason a case makes it to court to begin with: because of half-hearted or uneven policy application. We make a point of drafting policies with appropriate “wiggle room” for exactly this reason: the more discretion that’s left to the employer, the less potential liability. (This is also why we favor progressive discipline policies that explain that we apply progressive discipline when we determine that it is appropriate but that certain offenses will cause us to skip stages at our discretion.)

Lastly, write your handbook in plain English, at least those sections about daily operations, so that employees can actually use the thing. Even the equal opportunity policies, and those like it, can be drafted in understandable language.

This discussion only scratches the surface. We at Luchansky Law deal with these issues every day, from drafting handbooks from scratch to representing employers when their handbooks don’t do the things they were designed to do, and everything in between. 

If your handbook needs review, or if you don’t have a handbook and would like one, send me an email at aj@luchanskylaw.com.  I will immediately take this important obligation off your “To Do” list, will promptly get it done, and will get it done right

About Luchansky Law

Luchansky Law is a premier labor and employment law firm committed to providing exceptional legal representation and client service. Founded in 2004 by Bruce Luchansky, the firm offers a wide range of legal services to businesses and individuals, focusing on workplace issues, employment disputes, and compliance. Luchansky Law is dedicated to upholding the highest standards of diligence, professionalism, and compassion in its practice.

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