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Is your employee handbook a legal lifeline, a liability labyrinth, or do you operate with no handbook at all?

An outdated handbook is like a flip phone in a smartphone world – it technically works, but it is not doing you any favors.

Having and regularly updating your employee handbook and policies are important for legal compliance and risk mitigation. Handbooks and policies that are not updated to reflect new or changing laws can result in misguided decision making, frustrated employees, and liability!

A handbook allows employers to document essential policies, highlight attractive benefits, and ensure consistent administration of workplace rules and expectations. If a handbook is woefully out of date, it might fall out of step with the law, but, almost as importantly, it will fall out of step with your business’s practices.

The best handbooks are those that reflect the current state of labor and employment law and your current or desired practices. Therefore, if a handbook does not match how your operation truly functions, even if reflects the current state of the law, it will not be useful.

Risks of Outdated Handbooks or Policies

• First and foremost, outdated handbooks can create sources of liability. Most obviously, if a policy was previously lawful, but, due to a change in the law, is now unlawful or suspect, evidence of that written policy could be used against an employer to demonstrate liability. If your employee handbook fails to recognize new categories protected by anti-discrimination law, for example, an employee could use that to help demonstrate that they were discriminated against on the basis of that newly protected category because your business has no policy saying otherwise.
• Next, outdated written policies can create entitlements. Michigan wage and hour law states that fringe benefits, for example, are to be paid according to a “written contract or written policy.” MCL 408.473. That means if your out-of-date policy says employees receive 20 days of vacation and that unused vacation time will be paid out upon separation, it will not matter that you changed that practice 10 years ago; state and federal authorities could hold you to that promise.
• Outdated handbooks are more likely to be out of step with your current practices. If so, employees will come to learn that the handbook is not an accurate source of information about their job, and they will be inclined (perhaps rightfully so) to ignore the handbook altogether making it that much more difficult to get compliance and enforce your policies.
• Policies that are out of step with practice also create more stumbling blocks for consistent enforcement of rules. If the rule has changed dramatically from what was written in a policy or handbook, it is more difficult to hold employees accountable to the rule and more difficult for managers and supervisors to consistently enforce it. Inconsistent enforcement of rules, especially if they carry disciplinary sanctions, can be a first step towards a discrimination claim.

Recent Changes Impacting Handbooks

We are routinely asked how often we would recommend reviewing and updating handbooks. Labor and employment law changes constantly, so, at a minimum, we would recommend reviewing every two years, but it is not a bad idea to do at least an annual internal check to see if policies are in line with practice. To bolster that point, in the last three years there have been significant changes to employment law that may require a handbook update.

• In July 2025, the Michigan Supreme Court overturned decades of precedent in Rayford v. American House, by ruling that contractually shortened periods of limitation in adhesion contracts (like employment agreements) are no longer automatically enforceable. Your handbook may be one of the thousands of Michigan employer handbooks that features that now-unenforceable language.
• In February 2025, the Michigan Earned Sick Time Act (ESTA) went into effect, establishing an entitlement for all Michigan employees to paid sick time. If you are looking for additional information regarding ESTA, check out our previous article pertaining to it here.
• In June 2023, the Pregnant Workers Fairness Act (PWFA) went into effect. It requires a covered employer to provide reasonable accommodations to a qualified employee or applicant relating to, affected by, or arising out of pregnancy. You can review our previous article relating to it here.
• In May 2023, Michigan’s civil rights law, the Elliott-Larsen Civil Rights Act (ELCRA), was amended to expand the law’s definition of “sex” by adding “termination of a pregnancy” and “related” medical conditions.
• In March 2023, the ELCRA was amended to include “sexual orientation” and “gender expression” as protected categories for which an employee cannot be discriminated against in employment (among other areas).
• In December 2022, federal legislation introduced the PUMP for Nursing Mothers Act (“PUMP Act”), expanding rights under the Fair Labor Standards Act (FLSA) for nursing workers. You can check out our previous article pertaining to it here.

Labor and employment law is ever-changing, and there might even be updates to this list after this Article is a few months old. If your employee handbook has not been updated in the last few years, you are almost certainly missing language that protects your operation from liability and gives employees fair notice of their rights.

Reinforcing Culture and Values Through Policies

While legal compliance is certainly key in drafting and updating employee handbooks, these documents also serve an important purpose in outlining and reinforcing workplace culture and values. A handbook typically begins with the employer’s mission, vision, and core values. This section can provide insight into the company’s overarching purpose and how its principles guide decisions and behavior. That may serve as a point of inspiration or pride for an employee.

Culture is the shared set of values, behaviors, and expectations that define how your entity operates. While culture is lived day-to-day, it can – and should – be documented in your employee handbook.

• Employees gain clarity on what is important to the company from their first day.
• It creates consistency by sharing the company’s culture in written form.
• Employees are likely to feel more connected to the company when they understand the reason behind the decisions and policies.

Clarifying Roles, Responsibilities, and Expectations

For new hires, the employee handbook serves as a comprehensive introduction to the company’s mission, vision, core values, and culture. A well-maintained employee handbook can streamline the onboarding process by providing employees with a reference guide detailing roles, responsibilities, and expectations within your company. If that handbook is out of date, new hires may be confused or misled. And savvy new hires who recognize that the policies are outdated will immediately be stuck with the first impression that your operation is not detail oriented or focused on effective communication with employees.

Current employees can use the handbook as a first point of reference for questions about benefits, leave policies, company holidays, or procedures that can potentially reduce routine questions on those topics. Current employees will certainly be aware of policies that are out of date. Empower employees to point out policies that may need updating to reflect current practices!

Keeping Pace with Technology, Remote Work, and Evolving Norms

It is important that a handbook evolve with changing workplace environments and expectations. The workplace has changed for some within the last five years, primarily driven by the COVID-19 pandemic and the rapid adoption of new technology like Artificial Intelligence. Consideration should be given to how these evolving norms impact your workforce and how your employee handbook can and should be updated to provide clarity.

Fueled by the pandemic, remote work and hybrid work models became mainstream for a significant portion of the workforce. If your employee handbook does not address remote or hybrid work models, it should. An important area to detail out in your employee handbook relates to employee use of employer-supplied technology. A specific technology policy can safeguard your company by detailing that employees should not have an expectation of privacy on any employer-supplied technology. You may also consider an Artificial Intelligence Use Policy as many of your employees may be increasingly reliant on use of Artificial Intelligence with no guardrails for information security or quality assurance.

The Challenges and Opportunities of Having an Effective Employee Handbook

Developing a comprehensive, legally sound, and practical handbook requires significant time and effort. Laws, regulations, and company policies change over time; your employee handbook should adapt to these applicable changes. An outdated employee handbook can be misleading, or worse, legally harmful. Employers must commit to regularly reviewing, updating and redistributing their employee handbooks.

Although this may seem daunting, the labor and employment experts at Fahey Schultz Burzych Rhodes PLC have years of experience reviewing employee handbooks and are ready and willing to help assess your employee handbook needs.

Remember, a missing or outdated handbook is not just an inconvenience—it is a liability