An employee handbook is important for a number of reasons. For one, it helps prevent confusion among your employees by explaining key company policies. By the same token, spelling out these policies in advance can head off disputes later and provide a reference point if there is a disagreement. An employee handbook also provides a convenient place for the employer to state certain policies required by law.

Employers are advised to include at least the following in their employee handbooks.

General Provisions

1) Clearly specify that the employment relationship is “at-will.” At-will employment is usually presumed in Arizona unless otherwise stated, but a policy in an employee handbook can sometimes override this presumption.

In Demasse vs. ITT Corporation, No. CV-97-0177-CQ (1999), the Supreme Court of Arizona held that if a reasonable person would interpret a provision in an employee handbook—including one related to termination or other conditions of employment—as a promise, that provision is an implied contract that the employer cannot modify unilaterally. For this reason, in addition to specifying “at-will” employment, the handbook should explain that it is not a contract and can change without notice.

2) Explain company procedures related to drug and alcohol testing. Employees need to be clearly apprised of company procedures related to testing for drugs and alcohol.

For example, both medicinal and recreational marijuana are legal in Arizona, and there are certain legal requirements for employers surrounding its medicinal use by employees (see below). There are also drug testing regulations to comply with. Moreover, companies can face significant liabilities if their employees are impaired by drugs or alcohol at work. 

3) Provide policies on discrimination, harassment, and accommodation of disabilities. Federal, state, and local laws prohibit discrimination and harassment in the workplace, and an employee handbook should make it clear that the company is an equal opportunity employer that complies with these laws.

It also should establish procedures for handling discrimination and harassment complaints, including a non-retaliation provision that protects those who file them. The employee should specifically acknowledge these policies in writing.

4) Specify standards of workplace conduct. Every employer has an idea of the kind of workplace they are striving to create, and setting out appropriate standards of conduct can go a long way toward achieving this vision.

Whether it’s hours worked, what to wear, or how disciplinary actions are handled, be sure to explain what conduct is expected of employees and the consequences for failing to meet these expectations.

5) Provide IT security protocols. Companies are facing more internet security threats than ever, and data breaches are becoming all too common.

Explain what the company is doing to combat these threats and how employees are expected to help (e.g. updating passwords, using a company virtual private network when working remotely, etc.). 

6) Explain vacation policies. While Arizona requires a certain amount of earned sick leave (see below), other paid time off policies differ from company to company.

Spell these out in detail, including how PTO is earned, what paid holidays are provided, what constitutes an appropriate break, and any other pertinent details. Also note that employers have certain obligations under the Family Medical Leave Act.

Arizona-Specific Provisions

Employers should check their employee handbooks to make sure they state policies that comply with certain Arizona laws.

For example, the Arizona Medical Marijuana Act prohibits all Arizona employers from discriminating against an employee who tests positive for marijuana but has a medical marijuana card. However, employees cannot be impaired by marijuana while at work.

In addition, an employer may decline to assign someone with a medical marijuana card to a “safety-sensitive” position if the employer believes in good faith that the employee is currently using any drug and if it could cause impairment or hurt job performance and endanger the employee or other people.

Examples of “safety-sensitive” positions could be operating or repairing a motor vehicle or heavy machinery, working in a customer’s home or vendor’s place of business, preparing or handling food, or working in a medical or engineering job.

The Arizona Fair Wages and Healthy Families Act requires all employers in the state to provide employees with one hour of earned paid sick time for every 30 hours that they work. Earned paid sick time can be capped at 24 hours per year for employers with fewer than 15 employees or 40 hours per year for employers with 15 or more employees. 

Because violating these laws carries significant penalties, employers should carefully draft policies to ensure compliance and clearly explain the policies in their employee handbooks.

Contact Counxel Legal Firm

The above list is not exhaustive, and you may want to include other provisions in an employee handbook depending on your situation.

Moreover, as explained above, it is important to clearly and accurately state policies that comply with federal, state, and local laws. If you would like to talk to an attorney about what an employee handbook should contain, contact Counxel Legal Firm at 480-536-6122 or at

This article is intended for informational purposes only and does not constitute legal advice for your specific situation. Use of and access to this article does not create an attorney-client relationship between you and Counxel Legal Firm. Please contact or 480-536-6122 to request specific information for your situation.

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