Every business should have an employee handbook. Probably the most compelling reason for this is that having a discrimination and harassment policy may provide an employer a defense to claims against the business. If an employer has a policy that prohibits discrimination and harassment, provides a mechanism for employees who believe they are victims of such to report it, and the employer responds reasonably to such complaints, the employer may not be held liable for such claims.
Another important reason to have an employee handbook concerns preventing the loss of an employee’s exempt status if an employer inadvertently makes an improper deduction from his/her salary. If an employer has a clearly communicated policy that improper deductions from exempt employees’ salaries are prohibited, has a complaint mechanism for reporting such improper deductions, reimburses an employee for an improper deduction, and makes a good faith effort to comply with the law in the future, an employer may prevent the loss of an employee’s exempt status.
Employee handbooks should also set forth information about employee benefits and other employment policies, procedures, and rules of conduct.