Most employers have some form of employee handbook. Handbooks serve many purposes. They can be a valuable communications and employee relations tool, presenting the philosophy of the organization, offering employee information, and establishing the working environment. Handbooks describe the employee benefits a company provides to its employees. Even if an employee doesn't take advantage of certain benefits, the policies can be a powerful motivator and an effective tool for reducing turnover.

A handbook also promotes consistency in dealing with employees. Once an employer has determined what its policies will be, having written policies discourages favoritism and discrimination and encourages the application of rules/policies equally to all employees. A well-prepared handbook will answer at least three-quarters of the routine questions employees ask.

Finally, written rules are helpful in winning litigation. If an employer can demonstrate that its rules are reasonable, written, distributed to all employees, and uniformly enforced, an employer has a greater likelihood of prevailing against such lawsuits as discrimination, unemployment compensation, and wrongful discharge.

No specific legislation says that a handbook is an employment contract in Wisconsin, but the state Supreme Court has ruled that sections in an employee handbook can be as legally binding as an employment contract. To reduce employee expectation of guaranteed employment, job security, or an employment contract, we recommend the following measures.

• Avoid creating an employment contract by including a disclaimer. Wisconsin courts have ruled that a disclaimer in a handbook emphasizing the at-will status of employees may effectively invalidate handbook provisions that may be called into question. 
• Avoid such terms as "probationary period" for new hires.
• Avoid the term "permanent employee" in the handbook. The word "permanent" can connote lifelong employment, and it conflicts with the "employment-at-will" concept.
• Avoid restrictive discipline and discharge policies. We recommend that flexible, general statements be used rather than detailed procedures. If your company uses a progressive discipline system, you should include a provision that states progressive discipline may not be followed in all cases, and that your management has the right to summarily terminate employees depending on the nature of the violation and circumstances.

What should you include in an employee handbook? We recommend at least including the following features.

An introduction

Your introduction section should include a welcome letter from the company's president, information about the company's history, a copy of your mission statement, and information about the handbook that includes the disclaimer.

Employment policies/practices

This section should include your policies on equal employment opportunity, freedom from harassment, hiring of relatives, employment categories, confidentiality, conflict of interest, and outside employment, among others.

Employee benefits

This section should include all your paid time-off policies (vacation, holiday, sick leave, etc.), information on insurance and retirement benefits, and information on special benefits you may offer your employees (tuition reimbursement, flexible spending accounts, etc.).

Timekeeping and payroll

In this section, you want to provide employees with information on time records/pay days/pay periods, work week/scheduling, overtime, rest and meal periods, pay advances and deductions, compensation policy/philosophy, performance appraisal, and pay reviews.

Employee conduct

This section should include your policies on smoking, drug and alcohol, company dress code, safety issues, solicitation, conduct and discipline, and employment termination, among others.

Employee acknowledgement form

Without the acknowledgement form, an employee is always free to say that he/she was unaware of the work rule/policy. Always get a signed acknowledgement form from each employee who receives an employee handbook.

Remember to review and update your handbook annually and individualize the handbook. "Canned" handbooks or canned handbook language are not as effective as policies that truly reflect the nature of your business. A final piece of advice on the information that appears in your handbook: before you state it, review it carefully, and make sure you mean it; then adhere to your policies and philosophies.