Your employee handbook is sitting in a 47-page Word document from 2019 that nobody reads. Employees ask you the same policy questions over and over. You're not sure if it's compliant with current laws. And updating it means re-sending the whole PDF to everyone.
Modern HR software changes this. Handbooks become living documents—easy to update, automatically distributed, trackable for acknowledgments, and integrated with your other HR systems. This guide shows you how to create (or modernize) your employee handbook using HR software.
Get our handbook template, state-specific compliance checklist, and policy library.
Download Free ToolkitYour handbook MUST comply with the laws in every state where you have employees. Federal law sets the baseline, but many states have stricter requirements.
| State | Unique Requirements |
|---|---|
| California |
• Meal/rest break requirements (very specific timing) • Paid sick leave (mandatory minimum) • Kin care (use sick leave for family members) • No non-compete agreements (void) • Expense reimbursement (must reimburse work-related expenses) • Wage theft prevention notice |
| New York |
• Paid sick leave (varies by employer size) • Sexual harassment training (annual requirement) • Lactation accommodation law • Wage theft prevention act notices • Paid family leave program |
| Massachusetts |
• Earned sick time (mandatory) • Parental leave act • No salary history questions • Specific meal break requirements |
| Colorado |
• Paid sick leave (2021 law) • Specific rest/meal break timing • Must post job openings with salary ranges • Equal pay for equal work transparency |
| Washington |
• Paid sick leave (mandatory) • Paid family and medical leave • Wage payment requirements • Specific meal/rest break rules |
| Illinois |
• No salary history questions • Day of rest act • One day of rest in seven • Meal period act requirements |
Look for these handbook features:
Top platforms for handbooks: BambooHR, Gusto, Rippling, Workable, Deel
Where to find templates:
Why use a template: Legal compliance is complex. A good template ensures you don't miss critical policies or use dangerous language.
What to customize:
What NOT to change:
Budget $1,500-3,000 for attorney review. This is the most important investment you'll make.
What the attorney reviews:
How handbooks work in HR systems:
Why acknowledgments matter: Proves employees received and understood policies. Critical in lawsuits.
Acknowledgment should say:
Good HR software: Employees sign electronically, acknowledgments stored permanently in their file, you can run reports to see who hasn't signed.
Don't just distribute the handbook and hope managers read it. Hold a training session covering:
Why it's great: Beautiful handbook builder with drag-and-drop sections, built-in templates, automatic updates for policy changes, electronic signatures, and employee portal where staff can search policies.
Handbook features: ⭐⭐⭐⭐⭐
Best for: 10-500 employees, first-time handbook creators
Pricing: Included in BambooHR subscription (~$5-9/employee/month)
Try BambooHR Handbook Builder →Why it's great: Simple handbook tools included with payroll, state-specific templates, automatic acknowledgments during onboarding, integrates with offer letters and I-9s.
Handbook features: ⭐⭐⭐⭐
Best for: 1-100 employees, companies using Gusto for payroll
Pricing: Included in Gusto Core+ plan ($40/mo + $6/employee)
See Gusto Handbook Features →Why it's great: Handbook + policies + compliance training in one platform. Automated policy updates when laws change. Can create role-specific or location-specific handbooks.
Handbook features: ⭐⭐⭐⭐⭐
Best for: 25-500 employees, multi-state companies
Pricing: Included in Rippling platform (~$8/employee/month base)
Try Rippling Handbook Tools →Why it's great: Dedicated handbook software (not part of broader HRIS). Super easy to use, beautiful employee experience, automatic compliance updates, integrates with most HRIS systems.
Handbook features: ⭐⭐⭐⭐⭐
Best for: Companies that want best-in-class handbook without switching HRIS
Pricing: $4-6/employee/month
Try Blissbook Free →If your HR software doesn't include templates:
With modern HR software:
Best practice: Maintain a "Handbook Changelog" page listing all updates by date. Employees can see what's changed without re-reading everything.
| Resource | What It Provides | Cost |
|---|---|---|
| SHRM Employee Handbook Templates | 50-state compliant templates, customizable by industry, regular updates | $219/year (membership) |
| DOL (Department of Labor) | Free posters, FMLA policy examples, wage and hour guidance | Free |
| State Labor Departments | State-specific required policies, sample language | Free |
| HR software built-in templates | Pre-written policies ready to customize | Included with platform |
| Employment attorney | Custom handbook review/creation, state-specific compliance | $1,500-5,000 |
| RocketLawyer / LegalZoom | Template + basic attorney review | $300-800 |
Dangerous language: "Employees are guaranteed annual raises," "Job security," "Permanent position," "Employment will continue unless..."
Why it's bad: Makes at-will employment unenforceable. Employee can sue for wrongful termination claiming you promised continued employment.
Fix: Use "at-will" language throughout. "Employees may be terminated at any time, with or without cause or notice."
Dangerous language: "Employees will receive: 1st offense - verbal warning, 2nd offense - written warning, 3rd offense - suspension, 4th offense - termination"
Why it's bad: Creates obligation to follow exact process. Limits your ability to terminate for serious misconduct.
Fix: Add flexibility: "The company may use progressive discipline, but reserves the right to skip steps or terminate immediately for serious misconduct."
Example: "PTO requests must be submitted 30 days in advance"
Why it's bad: What about emergencies? You'll make exceptions, creating inconsistency.
Fix: "PTO requests should be submitted as far in advance as possible, ideally 30 days. Emergency situations will be handled on a case-by-case basis."
Example: Handbook from 2015 doesn't mention remote work, COVID policies, or recent paid sick leave laws.
Why it's bad: You're not in compliance with current laws. Employees don't know current policies.
Fix: Review annually minimum. Subscribe to HR compliance updates or use HR software with automatic policy updates.
Example: Emailing handbook PDF with no confirmation employees read it.
Why it's bad: In harassment lawsuit, employee claims "I never saw the harassment policy." You have no proof.
Fix: Require electronic signature acknowledging receipt and understanding. Store in personnel file.
No—with exceptions. Most states don't require handbooks, BUT certain policies ARE required and a handbook is the easiest way to distribute them: harassment policy, FMLA notice (if 50+ employees), state-specific paid sick leave notices, etc. Practically, any company with 10+ employees should have a handbook for consistency and legal protection.
You can, but we don't recommend it. Use a reputable template (SHRM, your HR software) and then have an attorney review it ($1,500-3,000). The cost of a mistake (wrongful termination lawsuit = $50k-500k) far exceeds attorney review costs.
20-60 pages is typical for small/mid-size businesses. Startup with 10 employees? 20-30 pages. Company with 500 employees in multiple states? 50-80 pages. Avoid 100+ page handbooks—nobody reads them. Focus on clarity over comprehensiveness.
Not necessarily. Most companies use one core handbook with state-specific addendums. Example: Main handbook applies to all employees, plus "California Employee Addendum" with CA-specific policies. Good HR software can show employees only the sections relevant to their location.
Yes—that's why the handbook includes disclaimers: "Company reserves the right to modify policies at any time." When you make changes, update the handbook, notify employees of the change, and (for major changes) require re-acknowledgment. Keep old versions archived.
They're still bound by the policies—employment is conditional on complying with company policies. Document that you provided the handbook. If they continue to refuse, note in their file: "Employee [name] received handbook on [date] but declined to sign acknowledgment." Refusal to sign can be grounds for discipline/termination.
Yes. That's the beauty of HR software—employees can access the handbook 24/7 from any device. Old method (PDF in shared drive) is clunky and people can't find it. Modern handbooks are searchable: employee types "PTO policy" and immediately sees the relevant section.
Yes, absolutely. Contractors are NOT subject to employee policies (or they may be misclassified). Create a lightweight "Contractor Handbook" covering: confidentiality, invoicing/payment, work product ownership, termination terms. Keep it separate from employee handbook.
Minimum annually (ideally Q1, before annual policy rollouts). Plus immediate updates when: laws change, you expand to new states, major policy changes (new benefits, remote work policy), or after employment-related incidents that revealed policy gaps. Set a calendar reminder.
Yes, if you violate your own policies. Example: Handbook says "PTO is paid out on termination," then you don't pay it—lawsuit. That's why disclaimers matter ("policies are guidelines, not contracts") and why you should under-promise and over-deliver rather than vice versa.
Get our complete employee handbook toolkit with templates, state-specific compliance guides, policy library, and attorney review checklist.
Download Free Handbook Kit