What Happens If My Company Doesn't Have an Employee Handbook?

The law does not require employers to adopt an employee handbook. (One exception: California law requires all employers to adopt the written policy prohibiting sexual harassment.) However, your policies will not be as clearly communicated if you don't adopt an employee handbook. And if your company doesn't have a handbook, managers and employees will need to rely on the company's "institutional memory" to ensure that policies are consistently applied.

Work policies and expectations also take on more importance and are more likely to be followed when you document them in an official handbook. 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 enforcement and even legal problems later.

Companies typically publish HR manuals or employee handbooks when they grow to 50 to 100 employees. That figure is shrinking, though, as new tools make publishing a manual easier than ever before. In a small workforce, it's relatively easy to apply personnel policies consistently, because the number of managers making decisions about them is limited. The larger the workforce, the greater the need to have the company's personnel policies in written form.

Overall, publishing an employee manual or handbook is a good idea. However, it must be executed carefully, so you may want to consult a lawyer to be sure you're addressing the right issues with the right level of specificity.