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 South Dakota, while there is no specific state or federal law mandating the creation of an employee handbook, it is a common practice for employers to use handbooks to communicate company policies, procedures, and employee benefits. These handbooks serve to inform employees about the company's mission and values, as well as to provide answers to frequently asked questions, thereby saving time for HR and management. When distributing handbooks, employers in SD often require employees to acknowledge receipt to ensure they are informed of company policies. However, it is crucial for employers to ensure that the language in the handbook does not inadvertently create a contractual agreement that would alter the at-will employment relationship, unless intended. At-will employment allows for termination of employment by either party without cause. Additionally, employers must be cautious not to include language that could be interpreted as restricting employees from engaging in protected, concerted activities, such as discussing wages or other employment terms, as these are protected under the National Labor Relations Act (NLRA).