Although no state or federal law requires an employer to have an employee handbook, there are many policies and procedures the law does require employers to communicate to employees. Many employers use an employee handbook to describe the employer’s history, mission, values, policies, procedures, and employee benefits. A well-written employee handbook also answers many routine questions employees may have and avoids using additional time and resources of employees, the human resources (HR) department, or managers in answering those questions.

Employers often require each employee to sign a written acknowledgment of receiving the employee handbook—but must be careful not to have the handbook construed as an employment agreement, which might change the employee’s status from an at-will employee who can be fired or terminated at will to an employee who can only be fired or terminated for cause.

Employers must also be careful to avoid overly broad statements in the employee handbook that restrict the ability of employees to discuss wages and other terms and conditions of employment—including criticisms of the employer—which are known as protected, concerted activities.

In California, while employers are not mandated by state or federal law to provide an employee handbook, it is a common practice to do so. The handbook typically outlines the company's history, mission, values, policies, procedures, and benefits, serving as a resource for employees to understand their workplace and reduce the need for direct inquiries to HR or management. Employers in California often ask employees to acknowledge receipt of the handbook to ensure they are informed of company policies. However, it is crucial that the language in the handbook does not inadvertently create a contractual agreement that could alter the at-will employment relationship, unless intended. At-will employment allows employers to terminate employees without cause, and any implication of guaranteed employment could be legally binding. Additionally, employers must be cautious not to include provisions that could be interpreted as restricting employees' rights to engage in protected, concerted activities, such as discussing wages, working conditions, or criticisms of the employer, as these are protected under the National Labor Relations Act (NLRA).