Updating Your California Employee Handbooks in 2022


By: Eileen P. Darroll

Employee Handbooks protect employers from potential litigation. California has notoriously strict laws protecting employees; all businesses should regularly review handbooks for updates. If your business is based outside California, you should consider creating an addendum for California employees to mitigate the risk of litigation. In California, employers with at least five employees must distribute written harassment, discrimination, and retaliation prevention policies. Read on to see some of the essential policies every Employee Handbook should contain.

Employers should include the following policies in onboarding forms, as well as in Employee Handbooks: 

  1. ADA/FEHA Interactive Process – Employers should provide employees with written notice of their right to the interactive process and invite employees to engage in the interactive process for any mental or physical disability. 
  1. Meal and Rest Period Policies – Employers should provide a written meal and rest period policy in new hire forms and in the Employee Handbook 
  1. At-Will Status– Every new hire form should state that the employee’s employment is on an at-will basis. 
  1. Right to Inspect – Employers should expressly reserve the right to inspect desks, email correspondence, lockers, and phones without the employee’s consent.  
  1. Policy Prohibiting Unlawful Harassment, Discrimination or Retaliation – Employers should provide a policy prohibiting any unlawful harassment, discrimination, or retaliation. 
  1. Notice of Potential Modification – Employers should state that the policies, benefits, and practices stated in the handbook may need to be modified, amended, supplemented, revised, or reversed, except for the at-will policy which may not be modified, amended, supplemented, revised, or reversed absent a writing signed by the employee and a designated representative of the employer. 

Employee Handbooks should contain the following provisions:1 

  1. A written policy prohibiting unlawful harassment, discrimination, and retaliation:   
  • The policy should specifically list each of the protected characteristics under California law. 
  • The policy should expressly prohibit any retaliation for reporting any unlawful harassment or discrimination. 
  • The policy should provide a way for the employee to bypass an immediate supervisor to report a policy violation. 
  • The policy should not require the employee to make a written complaint as a condition of investigating the allegations. 
  • The employer should not promise confidentiality but should promise the information will remain as confidential as practically possible. 
  • The policy should prohibit bullying. 
  • The policy should prohibit harassment by non-employees and provide a complaint mechanism.  
  1. An ADA/Interactive Process Policy including the following terms:  
  • The employer does not discriminate against employees with known mental or physical disabilities. 
  • The employer will make reasonable accommodations of known mental/physical disabilities.  
  • Invite employees to engage in the interactive process. 
  1. An FMLA/CFRA Policy– A statement advising that FMLA and CFRA leave will be provided, if applicable, to eligible employees.  
  1. Employee Classification Policy including the following terms:   
  • The terms of any probationary period.  Define “hours worked” based on “hours scheduled to work”. 
  • Address Temporary employees using calendar days and indicating the benefits temporary employees will receive, if any. 
  • Address On Call/Stand by Employees  
  1. Meal and Rest Period Policies:  
  • Employers should have written meal and rest period waivers signed by employees.   
  • Prohibit working off the clock 
  • Use a written timecard acknowledgment.  
  1. Reservation of Rights: 
  • The employer should reserve its right to control over desks and lockers, email, and cellphones.   
  1. Pregnancy Disability Leave/Transfer Policy: 
  • An employee disabled by pregnancy has the right to be temporarily transferred to a less stressful/less hazardous position. 
  • However, the employer need not bump/displace another employee to make a position available and the employer need not transfer the employee to a position she is not qualified for.  
  1. Vacation Pay Policy:  
  • Employers have no obligation to provide paid vacation.  
  • If paid vacation is provided, pay is regulated.   
  • “Use it or lose it” policies are illegal; employees cannot forfeit vested vacation pay.   
  1. Sick Pay Policy: 
  • Mandatory: Unused sick pay can be lost.  
  • If the employer combines vacation pay and sick pay as “PTO” into one policy, all unused but accrued time must be paid when employment terminates. 
  1. COVID Pay: 
  • The current law sunsets on September 30, 2022.   
  • COVID pay must be separately reported on paystubs. 
  1. Modification Policy: 
  • The handbook should state that the policies, benefits, and practices contained in the Handbook may need to be modified, supplemented, rescinded, or reversed, except the at-will policy which cannot be modified, supplemented, rescinded, or reversed, unless in a writing signed by the employee and an authorized representative of the employer. 
  1. Discipline and Performance Policy:   
  • Identify standards of performance and conduct 
  • Identify consequences of failing to meet those standards and conduct 
  • It is impossible to list all types of misconduct; the Handbook should list misconduct and unsatisfactory performance. 
  • Allow latitude on the types of discipline the employer may impose. 
  • Reserve the right to terminate at will at any time during or after probation. 
  1. Acknowledgement Form – The employee should acknowledge receipt and responsibility to read, understand, and comply with the policies and practices set forth in the Employee Handbook

For additional information, please contact Eileen Darroll at or your FMG attorney.