Employee Handbooks in Minnesota – Key Topics, Common Pitfalls, and Drafting Tips

Analysis:

An employee handbook is something every employer should create. The handbook sets out the understanding between you and your employees about how each party is to conduct themselves in the business. You should provide each employee a copy of the handbook at hiring.

Key Topics

Every employee handbook should contain a few key topics. While you should customize the topics based on your individual needs, the following topics are universally useful.

• Business Policies – Every employee handbook should contain the business’s basic policies. Every handbook should include what type of organization structure exists. The book should also include whether the employer is an equal opportunity employer. The book should have the company’s harassment policy and chain of command for reporting incidents, and how any incidents need to be documented. The handbook should also include the business’s bad weather policy, if relevant. In addition, the business policies section should include the following: drug, alcohol, and tobacco use policies; dress code; phone use policies; required or encouraged methods of transportation; and, if applicable, use of company equipment for personal reasons.

• Employee Work Policies – The employee handbook should clearly lay out the work policies each employee is expected to follow. This section should clearly list the employee’s job description, and if there are multiple positions, each position should be clearly defined. This section should also include the expected hours for each employee or shift. The employee work policies section should also cover attendance and lateness and how occurrences will be handled. This section also needs to cover the employee’s work schedule and the company’s probationary period, if one exists.

• Employee Discipline – Minnesota follows the at-will employment doctrine: absent a contract or statute providing otherwise, an employee may quit at any time for any reason, and you may discharge an employee for any reason that is not illegal (Pine River State Bank v. Mettille, 333 N.W.2d 622, 627 (Minn. 1983)). Illegal reasons include discrimination under the Minnesota Human Rights Act because of race (including traits associated with race, such as hair texture and protective hairstyles), color, creed, religion, national origin, sex, gender identity, marital status, status with regard to public assistance, familial status, membership or activity in a local commission, disability, sexual orientation, or age (Minn. Stat. § 363A.08, subd. 2). The 2023 Take Pride Act added gender identity as a stand-alone protected class. Even though Minnesota is an at-will state, the employee handbook should clearly lay out any known terminable or disciplinary offenses. The handbook should also describe how discipline is to occur (verbal, written, and/or automatic termination). Finally, if there is an alternative dispute resolution requirement, such as arbitration, that needs to be clearly laid out in the handbook.

• Employee Orientation and Training – The handbook should always include an orientation and training section. In this section, you should include how orientation and training are compensated, when they take place, and how long they will last.

• Employee Pay Information – You should clearly lay out for the employee how compensation works. The handbook should include the pay dates and the pay period. This section should also include how employee compensation is determined, including annual cost-of-living raises and performance review raises. Finally, this section should contain information about bonuses, if any are offered, and how they are earned.

• Time Off – There are many reasons employees may need time off, and this section should cover all of them.

  • Sick and Safe Time – Minnesota now requires paid sick leave. Effective January 1, 2024, the Earned Sick and Safe Time (ESST) law requires nearly every employer to provide each covered employee paid earned sick and safe time (Minn. Stat. §§ 181.9445–181.9448). An employee is covered if you anticipate the person will work at least 80 hours in a year in Minnesota. Time accrues at a minimum of one hour for every 30 hours worked, up to a maximum of 48 hours per year (Minn. Stat. § 181.9446). The time is paid at the same base rate the employee earns from employment, which can never be less than the applicable minimum wage (Minn. Stat. § 181.9445, subd. 4). Your handbook should set out how the policy works, how many hours an employee accrues, and any notice the employee must give consistent with the statute. Employees may use earned sick and safe time to care for a “family member,” which the law defines far more broadly than many handbooks assume. Under Minn. Stat. § 181.9445, subd. 7, a family member includes the employee’s child (including a foster, adopted, or adult child, a legal ward, or a child the employee stands or stood in loco parentis to); spouse or registered domestic partner; sibling (including a step or foster sibling); parent or stepparent (and anyone who stood in loco parentis to the employee as a minor); grandchild; grandparent; a child of a sibling (niece or nephew); a sibling of a parent (aunt or uncle); and a child-in-law or sibling-in-law. It also reaches the same relatives of the employee’s spouse or registered domestic partner (so in-laws such as a mother-in-law or father-in-law are covered through this clause), any other individual whose close association with the employee is the equivalent of a family relationship, and up to one individual the employee designates each year. Employees may also use accrued time as safety time for absences arising from domestic abuse, sexual assault, or stalking of the employee or a family member, including to seek medical attention, victim services, counseling, relocation, or legal action (Minn. Stat. § 181.9447, subd. 1(3)).
  • Family and Medical Leave – The federal government has the Family and Medical Leave Act of 1993, which gives eligible employees unpaid, job-protected leave (29 U.S.C. § 2601 et seq.). Minnesota has no statute titled the “Family Medical Leave Act.” It instead provides leave through its Pregnancy and Parenting Leave law, which is unpaid (Minn. Stat. § 181.941), and, with paid benefits beginning January 1, 2026, the state Paid Family and Medical Leave program (Minn. Stat. ch. 268B). If you meet the coverage threshold under the federal Act, lay out clearly in the handbook how that leave works for your employees. When drafting this section, you can refer to the US Department of Labor comparison sheet.
  • Leave of Absence – The employee handbook should clearly state whether employees are entitled to take a leave of absence for non-family-medical reasons. Such leaves are not required, but if you offer them, the terms of leave should be very clear.
  • Bereavement – Define any bereavement policy clearly, if you offer one. The handbook should state whether the time is paid, how many days off are offered for which relatives, and what documentation is required. Minnesota law does not require you to offer a standalone bereavement-leave benefit; a dedicated bereavement policy is at your discretion. Note, however, that under the Earned Sick and Safe Time law (effective January 1, 2024) a covered employee may use accrued sick and safe time to make arrangements for or attend a family member’s funeral or memorial, or to address financial or legal matters that arise after that death (Minn. Stat. § 181.9447, subd. 1(1)).
  • Vacation – The handbook should clearly define your vacation policy, including whether vacation time off will be paid or unpaid. Finally, the policy needs to state clearly how many consecutive days off can be taken at one time for vacation purposes.
  • School Events – Tell employees that, under Minnesota law, they may take up to sixteen hours of leave during any twelve-month period to attend school conferences or school-related activities related to their child, where those conferences or activities cannot be scheduled during nonwork hours (Minn. Stat. § 181.9412, subd. 2). The scope is broader than school conferences alone: where the child receives child care services or attends a prekindergarten regular or special education program, the same leave may be used to attend a related conference or activity, or to observe and monitor the services or program, provided it cannot be scheduled during nonwork hours (Minn. Stat. § 181.9412, subd. 2).
  • Civic Duties – The employee handbook needs to inform employees carefully about certain civic duties. The handbook needs to spell out your jury duty policy. If called for jury duty, an employee who must serve or chooses to serve cannot be fired, threatened, or coerced because of that service, and you must release the employee from the regular work schedule, including any shift work, to attend court (Minn. Stat. § 593.50, subd. 1). You may not require an employee to work an alternative shift on any day the employee is required to report to the courthouse for jury service (Minn. Stat. § 593.50, subd. 1). You are not required to pay wages for the time the employee spends serving on jury duty, and the handbook should explain this clearly. The handbook also needs to inform employees that Minnesota law gives every eligible employee the right to be absent for the time necessary to appear at the polling place, cast a ballot, and return to work, without any penalty or deduction from salary or wages, so the time is paid (Minn. Stat. § 204C.04, subd. 1). This right is not limited to election day; it also covers absence to vote in person during the time period allowed for voting in person before election day (Minn. Stat. § 204C.04, subd. 1).
  • Religious and Non-Religious Holidays – The employee handbook needs to clearly define which, if any, holidays will be observed and which will be work days. The handbook also needs to note whether the days off will be paid or unpaid. The handbook should cover rules for religious holidays that do not fall on closed days, and what accommodations you will make for the employee. Under Title VII, you must reasonably accommodate an employee’s sincerely held religious observance or practice (which can include time off for a religious holiday) unless doing so would impose an undue hardship, meaning a substantial increased cost in relation to the conduct of your business (42 U.S.C. § 2000e(j)). The Supreme Court clarified that standard in Groff v. DeJoy, 600 U.S. 447 (2023), replacing the older “more than a de minimis cost” test with the substantial-increased-cost standard. You generally must accept the employee’s assertion that the belief is religious and sincerely held and may not routinely demand proof; only where you have a bona fide, objective basis to doubt the request may you make a limited inquiry into the facts and circumstances (EEOC, Questions and Answers: Religious Discrimination in the Workplace).

• Job Performance Reviews – The employee handbook should explain how job performance reviews will be administered. This section should cover whether there will be job performance bonuses and raises.

• Employee Benefits – This section of the handbook should cover what benefits you offer to employees. It should explain the healthcare coverage you offer and, in compliance with the Affordable Care Act, where employees can obtain coverage. If you are subject to the Fair Labor Standards Act, you must give employees written notice of the Health Insurance Marketplace (Exchange) and how to contact it (29 U.S.C. § 218b). Only an “applicable large employer” (generally 50 or more full-time or full-time-equivalent employees) must offer minimum essential coverage or face an assessable payment (26 U.S.C. § 4980H); smaller employers have no coverage mandate. The ACA’s individual-mandate penalty has been $0 since 2019, so there is no longer a federal tax penalty on individuals who lack coverage (26 U.S.C. § 5000A, as amended by the Tax Cuts and Jobs Act of 2017). This section should also address whether severance pay will be offered, whether housing is covered, long- and short-term disability insurance, and workers’ compensation insurance.

• Employee Signature Page – Every employee handbook should have a signature page that is to be signed by the employee and added to their personnel file. The signature page indicates the employee has read and understands the handbook. Whenever the handbook is updated, the employee should be given a new copy, or a copy of the updated sections and a new signature page to sign.

Common Pitfalls

Having an employee handbook is very important for a business, because it clearly defines the roles, rights, and responsibilities of the employee and the employer. There are some common pitfalls you need to avoid to ensure the handbook is successful. The most common pitfalls of employee handbooks include:

• Failure to Have an Employee Handbook – Not having an employee handbook is the biggest pitfall when it comes to employee handbooks. There is a simple way to overcome this pitfall: create an employee handbook. If you create one, make sure each employee is given a copy or a chance to review the handbook and knows where a copy is at all times to refer to. Avoiding this pitfall will help the business run much more smoothly.
• Failure to Update the Employee Handbook – The second biggest pitfall with employee handbooks is not keeping them up to date. An out-of-date handbook will not be very useful and will cause undue hardship on the business. An easy way to avoid this pitfall is to update the existing handbook every time there is a change. There should be one person who has the duty to keep the book up to date and then provides employees with a copy of the changes that have been made.
• Failure to Comply with the Employee Handbook – The third pitfall employers face when it comes to handbooks is not complying with the handbook. Failure to comply leaves everyone uncertain of what they are supposed to be doing. The simplest way to resolve this pitfall is to comply with the handbook. If the handbook is no longer working, then it should be updated rather than disregarded.
• Failure to Provide Each Employee with a Copy of the Handbook – The fourth pitfall employers need to avoid is failure to provide employees with a copy of the book. Every employee should be required to read the handbook at a minimum and should really be provided with a copy. The handbook does not do any good if the employee does not have a copy to refer to. This is the easiest pitfall to correct. You should provide each employee with their own copy, or at the very least make sure there is an accessible, up-to-date copy in the employee area that can be easily accessed and referred to.

Drafting Tips

Drafting the employee handbook is an important process. The handbook should be drafted in a way that is useful and easy to understand. Things to consider when drafting the handbook include:

• Clear and Concise Writing – When drafting an employee handbook, the writing needs to be clear and concise. The handbook should avoid confusing terms. The book should be written clearly enough that a new employee will understand the rules as well as a seasoned employee.
• Clearly Defined Sections – The handbook should be separated into clearly defined sections. The employee should be able to flip to a specified section to find the rules, rather than having to hunt for what they need. A table of contents is always a good idea.
• Organized in Order of Importance – The handbook should be set up in order of importance. You should decide that order in advance of putting the book together. The order of the material matters because the book should have the most important and relevant information at the very beginning, which will help ensure it is easy to find.
• Easy-to-Read Font and Size – Choosing a good font and font size will help with the readability of the book. The font and its size should be easy to read. When putting the book together, it is best to avoid fancy, hard-to-read fonts, as well as small font sizes. Choosing the right font and size will make a world of difference, especially with visually impaired and older employees.
• Bound and Labeled – The handbook should be a book. It should be bound together in a book or a three-ring binder. The sections of the book should also be labeled to help employees and the employer locate the information they are looking for. Binding and labeling will make the book much more user-friendly and easier to access when it is needed. The handbook should also be kept in a digital form to make updating easier.

Conclusion:

Having an employee handbook is one of the best decisions any Minnesota business could make. While creating the handbook will take a little bit of work, the extra effort will be worth it. Employers who have a handbook for employees to follow will benefit from clearly defined policies and procedures. A handbook will also make life for the employer easier. There will be less room for excuses, a set of rules and procedures for everyone to follow, and a protocol when the rules are disregarded.

For additional information on employee handbooks see this resource page.