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Employee handbook may be written in the business formation stage

On Behalf of | Nov 22, 2017 | Business Formation

There are various standard legal procedures required to start a business in Oregon. One important component of a small business is an employee handbook, which is generally most useful if prepared and distributed before the business formation process ends. Unfortunately, only about one in four small businesses have an updated handbook. There really is no downside to having a good manual to assist workers in understanding the rules of the workplace, benefits, rules of etiquette and other general guidelines for the job.

Employee handbooks are not legally required but are considered wise business strategy on the part of the company owners. The handbook has the advantage of not only setting forth the rules of the workplace, but it also stands as source book for articulating the company’s culture, philosophy and values. The handbook also makes it clear that employees are hired on an “at will” basis, which means that they do not generally have a contract of employment to protect them from being terminated.

The manual has the effect of putting all personnel and human relations rules in writing. This defines the legal framework and leaves nothing to guess work. The manual gives employees an expected framework to follow with respect to basic rights and duties of the employment position. In addition, the failure to have a widely disseminated, understandable written policy on key issues may backfire on the company. The lack of such information may strengthen any lawsuits that are filed by employees or others.

There are ways in which the handbook can build a culture of pride by accentuating certain benefits and worthy values that the company will strive to achieve, from business formation through the later stages of business development. If a contract consistent with Oregon law is written in the correct manner, it can give many employees the feeling of being invested in the company. Of course, the company must be prepared to live up to the standards pronounced in the manual. Inconsistent and divergent policies, not comporting with the values stated during the business formation phase, whether written or oral, are a prescription for an occasional misunderstanding that may damage the morale of the workers.

Source:, “6 ways employee handbooks improve company compliance“, Marc McGinnis, Nov. 21, 2017