California Employee Handbooks laws & HR compliance analysis

California Employee Handbooks: What you need to know

Employee handbooks should be drafted according to the particular needs of each individual workplace and according to the requirements of state and federal law. Employers should try to develop policies and procedures that reflect the company's size, employee needs, and company philosophy, then should have an attorney familiar with state labor and employment laws review their handbooks for legal accuracy and timeliness. Outdated or erroneous policies can be as dangerous as having no policies at all.
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Employers should exercise caution when developing handbooks and related policy statements. To avoid implied contract claims, employers should issue only general statements of policy in employee handbooks and should always include an explicit statement reserving the right to alter, amend, or change any handbook policy at any time and for any reason.
California is an “employment-at-will” state. Therefore, an employer may generally terminate an employment relationship at any time and for any reason unless a collective bargaining agreement, employment contract, existing law, or recognized public policy provides otherwise.
Despite the statutory presumption in favor of the at-will standard, however, the California courts recognize that an implied contract may be formed by statements in an employee handbook. In examining such a claim, courts may look at factors such as the employer's personnel policies or practices, the employee's longevity of service, actions and communications by the employer that seem to assure continuing employment, and regular practices of the employer's industry (Guz v. Bechtel National, Inc., 8 P.3d 1089 (Cal. 2000)).
Although many courts ...

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