Employee Handbook Misconceptions

Does an Employee Handbook Really Matter? Yes it really does.

This is just one example of the many misconceptions employers may have about their company handbook. For so many reasons, handbooks do matter.

It’s no surprise that handbooks and employment laws create a level of confusion. As we say in the HR world, we are living in a state of grey until a determination is made in the courts. We want to stay several steps ahead of that and avoid the courts altogether.

In light of that, we thought it would be helpful to point out some of the common misconceptions we have come across when it comes to employee handbooks. The following is a list of our top three.

Misconception #1 – We Can Get By For Now

As long as we have something pulled together that resembles a handbook, we’ll be fine for now.

– When we have time, we’ll take a look and make sure the book corresponds to what we actually do in practice.

– We used this handbook at my last employer and it worked fine.

– I’ve heard having a handbook just opens the door to more lawsuits.

Issues to Consider

  • How difficult would it be to discipline an employee for something if your handbook contradicts your practice?
  • Would you be prepared if you had to turn over the company handbook in a lawsuit?
  • Could it appear discriminatory if supervisors are applying policies differently throughout the company?


  • If faced with a lawsuit, a thorough and compliant employee handbook will help show the company exercised “reasonable care” towards its employees. This goes a long way as a defensive posture.
  • Supervisors should be trained on the policies within the handbook and how to apply them. A handbook is only as strong as your weakest supervisor.

Misconception #2 –Were A Small Organization, This Doesn’t Really Affect Us

– We have 40 regular employees and use 10 employees from a temporary agency, so we don’t technically have 50 employees.

– We don’t really need to worry until we reach 50 or more employees.

– We only have 15 employees, I don’t think many laws and regulations apply to us.

Issues to consider

  • Do you have a joint employer relationship? For example, if you are using temporary employees from a staffing firm, the answer might be yes, depending on which regulation you are looking at and arrangements with the staffing firm.
  • The joint employer relationship can affect employee headcount under protections afforded by the Fair Labor Standards Act (FLSA), the Family Medical Leave Act (FMLA) and the Affordable Care Act (ACA) to name a few
  • Many state and federal laws come into play, even for employers with just a small number of employees. For example, Title VII is a federal law that prohibits gender discrimination by employers with 15 or more employees. However, the Missouri Human Rights Act (MHRA) and the Illinois Human Rights Act (IHRA) also prohibit gender discrimination. The MHRA applies to employers with 6 or more employees and the IHRA forbids gender discrimination by all employers, even if they only have one employee.
  • These regulations will affect what employers will want to espouse in their handbooks.


The chart below indicates a just a few of the federal employment laws that are enacted by a small number of employees:

Federal Employment Laws

Number of EEs


Fair Labor Standards Act



Equal Pay Act



Occupational Safety and Health Act



Health Insurance Portability Act



Fair Credit Reporting Act



Uniformed Services Employment & Re-employment Rights Act



Americans with Disabilities Act



Pregnancy Discrimination Act


Title VII Title VII of the Civil Rights Act


Many states will also have very specific laws that apply to small employers. These include things like jury duty leave, voting leave, pay requirements upon termination and many more.

Misconception #3 – We are an Employment At-Will Organization, We Don’t Need a Bunch of Policies

We are an at-will employer, we can hire and fire at will.

– As long as we state we are an at-will employer in our handbook we are covered.

– Just because a supervisor promises an employee a job, that doesn’t imply a real contract.  

Issues to Consider

  • If handbooks are not drafted properly, they can actually become enforceable contracts between employees and the company.
  • While it is true that an at-will organization can hire and fire at will, it should not fire in violation of workplace rights laws, such as those prohibiting discrimination and retaliation.
  • Supervisors should be trained on the dangers of an implied oral contract.


  • Organizations will want to include a carefully drafted at-will statement in their handbook as part of their legal protections against employment claims.
  • Avoid any language that could be interpreted to promise job security in the handbook’s disciplinary policy, performance and raise policies, layoff policy, probationary policies, and so on.


Employment laws are a tightly woven web of complex concepts that can not only overlap but can sometimes appear to be in conflict with each other. Truthfully, handbooks can be your best defense when it comes to employment related issues. Or your worst enemy if done incorrectly.

If you would like to rewrite your employee handbook and avoid these misconceptions and risks, please contact J.W. Terrill’s HR Consultants at hrconsulting@jwterrill.com. We offer a comprehensive process that will help you with the strategic development and implementation of your final handbook. To learn more about our process, check out our overview here.

Linkedin Facebook Twitter Email

About Michelle Perris

Michelle joined the Human Resources Consulting team with J.W. Terrill in 2012 and has over 8 years’ of experience in the in the Human Resources industry as a generalist including a strong focus on key HR practices including full cycle talent acquisition, employee relations, onboarding, compensation planning, performance management and the development of training programs. Michelle earned her Bachelor of Arts degree from the University of Missouri – St. Louis and is a member of the Society for Human Resources (SHRM).

View all posts by Michelle Perris

No comments yet.

Leave a Reply

Time limit is exhausted. Please reload the CAPTCHA.