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Workplace Rules For Business Owners & Employees

Filed under Office & HR.

Rules for workers may be legally required, but various optional workplace rules should be considered as well. Carefully selected workplace rules can protect your business from legal claims and help you maintain an orderly, positive work environment.

By  Mark Williams, Director of Operations, BizFilings

Managing the employees in your workplace effectively necessitates that even the smallest of businesses set up work rules. Work rules protect your business and your workers and if correctly implemented and executed, create and maintain a better work environment for all.

For small businesses, most work rules will be optional. However, federal and state laws may require your business to have and to post policies regarding certain workplace issues such as smoking, drugs and alcohol, and sexual harassment. In the areas that are regulated by law, you have no choice but to comply by instituting workplace rules.

So, why should you have work rules that aren't required? It's tempting to feel that, if work rules aren't required by law, there's no reason to bother with them. However, while you may save yourself some time initially by not worrying about work rules, chances are that not having them will cause you some problems in the future, particularly if you have at least a handful of employees.

Having formal work rules in your business, even if they're not required, are a good idea because they can help you protect your business from litigation and maintain a high quality of work life for your employees. You need to make sure that your employees understand what is expected of them, not only in the work that they do, but in their behavior and in other areas of your employment relationship. If the rules are carefully selected, clearly related to the business, and fairly enforced, they can help you to better manage your workplace and your workers.

Optional Work Rules to Think About

Apart from the required rules and policies, you basically have free reign to choose additional rules to help you manage your employees. Once you've taken care of the policies that are required, you can focus on choosing from the many other rules that are optional but that are, in many cases, a good idea to have.

While the rules that govern each employee's conduct must reflect the kind of work your business does and the conditions under which it is performed, there are some basic rules that you'll see over and over again if you ask businesses about their work rules and policies.

Employers can choose to have a simple set of work rules made up of a list of generally accepted and prohibited conduct or they may decide to have very detailed work rules and policies addressing specific behavior. Instead of having a lengthy, involved set of rules, small employers are likely to opt for a simple list of rules and guidelines to make it clear to employees what kind of behavior is expected.

You should keep the rules as general as possible, to give yourself as much flexibility as possible in enforcing them. Your work rules should reflect your individualism as a businessperson and the individuality of your business. You can create a simple one- or two-page handout that you give to each person as you hire them, covering such things as:

Work Smart

Some small business owners may find it appropriate to include more detail regarding other common workplace issues such as solicitation or selling at work, English-only rules, and employees' political and off-duty activities, including moonlighting.

Be sure to begin your list of rules with a statement like the following:

"It would be impractical to set forth a list of all activities that are considered to be illegal or contrary to good business practices and good employee-employer relations. This is intended only as a guideline."

All your rules should be reasonable and clearly related to the safe and efficient operation of the business. In general, it's not necessary to say that things like stealing, insubordination, or competing with your business are prohibited. Employees are expected to know these things, although you can create a written rule if you wish.

Work Smart

You're the best judge of what works in your workplace. Specifically address insubordination, workplace violence, gambling, arrested or jailed workers, and employee theft in your work rules as needed.

You may decide to explain why you have chosen specific rules for inclusion, and you may even assign a point system to offenses (much like a system of demerits).

You may also want to explain the consequences and discipline an employee may expect for breaking the rules or for racking up too many demerits. However, once again we recommend that you build some flexibility into your system by including a general statement that "any employee found engaging in these behaviors will be subject to disciplinary actions including reprimand, warning, layoff, or dismissal."

Keep in mind that in some cases you may be required to post or distribute a written policy to employees, but in most cases the way that you communicate your work rules is your decision. There are pros and cons for both written and verbal communication methods.

Be certain to include a disclaimer saying that the list of work rules is not intended to be an employment contract.

Tools to Use

The Business Tools contain a sample of general work rules that you can use as a guide in creating your own set of work rules. You may add or subtract from that as needed, but remember to make sure that each rule is reasonable and that each rule is appropriate.

Work Rules That Protect You From Legal Claims

One of the most persuasive reasons for having a set of solid work rules is that they can protect your business. Many employers have rules that protect them from liability — both legal and financial — and give them more freedom in managing and disciplining employees. Having certain work rules and policies in place may be the best way to protect your business from problems such as wrongful discharge claims and discrimination claims.

Work Smart

If you have a very small number of employees, however, you may want to avoid having any work rules other than those required by law. Why? Having no work rules about a given activity will give you more freedom to handle each situation on the basis of its own particular circumstances. If you have very few employees, generally the circumstances of each situation will be sufficiently different that discriminatory treatment or wrongful discharge will not be an issue. Only you can be the judge of which way to go on this issue.

Workplace Rules to Defend Against Wrongful Discharge Claims

Even if you are an at-will employer, which gives you great freedom in letting employees go, to avoid legal hassles when you terminate someone you want your reasoning and your actions to be sound and defensible. One way to do this is to have a few basic, clearly stated work rules that have been communicated to your employees. Then, an employee who breaks a work rule does so with the knowledge that the conduct is unacceptable and that such behavior might result in termination.

An employee who is aware of the existence and purpose of a reasonable work rule, but who chooses to disregard it, will have difficulty challenging any disciplinary action you may take. If you want to have a progressive discipline policy in place, you'll need to explain to employees how it works and which offenses merit which warnings and punishments.

Absent a previously communicated policy or rule, it is much easier for an employee to accuse the employer of being arbitrary or even discriminatory.


Your employee, Rachel, uses her business computer for some personal business. You don't have a formal policy on employee use of office equipment for personal business, but you fire Rachel for it because you feel it's cause for dismissal. There is no way that you can prove that Rachel knew that what she did would cause her to be fired. She might even believe that you really fired her because she's a woman.

Having a clear policy against personal use of business equipment would strengthen your position about why you fired Rachel, should she ever try to contest it.

Protection From Discrimination Claims

If you fire or discipline one employee for breaking a rule and don't fire someone else for the same action, you could be violating anti-discrimination laws. Having clear work rules ensures that every employee understands what is acceptable behavior and what isn't. A clear definition of what is required and the consequences of failing to comply make it easier for you to respond consistently to work rule violations. An ambiguous rule or uneven enforcement of any rule opens your actions to challenge as arbitrary or discriminatory.


Jack (an African-American employee) and Roger (a Caucasian employee) get into a fight on company time. You break up the fight and find out that Jack threw the first punch. You suspend Jack because he started the fight. You don't, however, suspend Roger because he didn't start the fight and it doesn't seem fair to punish him.

If you have a policy against fighting that says employees who fight on the job will be suspended, you've got a problem because you only suspended one of the employees involved, Jack. Such an action could be construed as disparate treatment because you only reprimanded one employee, and he is a member of a protected class. Jack could raise the issue of discrimination.

If your policy clearly states that fighting is not acceptable on work time, and that an employee who throws a punch or starts a fight will be suspended, you are in a much better position to defend your actions.

Disparate Impact Issues

Policies might be applied fairly and consistently to all employees, but might still penalize members of protected groups more often. Such policies are said to cause disparate impact, which can get you in trouble with the civil rights laws.


The following are some examples of work rules that may result in disparate impact:

  • A rule calling for disciplining of employees arrested and charged with a crime might have an adverse impact on minority workers because, in some areas, minority group members are more frequently arrested than nonminorities. You can still have such rules, but be prepared to prove that there's a strong business reason to have them.

  • Even a seemingly innocent rule requiring employees to wear a uniform can have an adverse impact on members of an ethnic or religious group that requires its members to wear a special head covering or some other identifying article of clothing.

In making rules, be sensitive to the needs and circumstances of your employees. In enforcing your rules, always be consistent and fair. That way, when disciplining employees is necessary, your actions will be defensible.

What to Consider When Selecting Your Work Rules

Work rules can help you create and maintain an orderly atmosphere that is pleasant to work in where employees can work effectively. Creating such an atmosphere is to your benefit as an employer because employees tend to be more creative and productive when they are content.

Work rules can help improve quality of work life by:

  • Creating an atmosphere where employees are treated with dignity and respect
  • Helping to ensure that employees conduct themselves in a professional and safe manner
  • Encouraging open communication between you and your employees
  • Ensuring that all employees are treated fairly and that they follow the same rules

However, because the relationship between work rules and quality of work life is an important one, if work rules are unreasonable, inappropriate, or unenforced, the rules can actually damage employee morale.

Selecting Appropriate and Reasonable Work Rules

While every employee's conduct should be governed by some work basic rules, the specific work rules you choose should be appropriate and reasonable for the work your employees do and the working conditions to which they are subject.


If your business requires employees to do physical labor in the outside in cold weather, or if your employees do not have any contact with the public or with customers, a restrictive dress code policy is more than likely inappropriate.

Similarly, if your business's success does not rely on trade secrets and sensitive information, it may not be necessary for you to have a noncompete or nondisclosure policy.

When you're considering the creation of a specific rule or policy, determine if it's right for your business by asking yourself the following questions:

  • Will this policy disproportionately impact one employee (or group of employees) over another, even if it is applied evenly to all employees?
  • Is this policy really necessary considering the work that my employees do?
  • Is this policy unduly restrictive in light of working conditions?
  • Is there a sound business justification for this policy?
  • In what situations would this policy be used?
  • Have there been situations in the past where this policy would have been applicable and useful?
  • Am I willing to enforce this policy?
  • What documentation will be necessary to administer and enforce this policy?
  • Will the time and effort necessary to administer and enforce this policy outweigh the benefit of having it?
  • What would the consequences be for someone who broke this rule or disobeyed this policy?
  • Do other businesses or colleagues have similar policies? What do they think of them? Are they useful or burdensome?

Avoid Overly Restrictive Work Rules

Overly restrictive work rules mean nothing but trouble. Not only do they create unnecessary hardship for employees, but they make you seem unreasonable and unconcerned about the feelings and needs of your employees. If you have a rule, you should be able to give any employee who asks a good, business-related reason for having it. The reasons should be clearly related to the employee's job, and you should not impose personal opinions or beliefs on your employees in the form of work rules.


When Roger interviewed for a job and was subsequently hired, he was clean-shaven. When he reported for his first day at work, Roger was wearing a beard. The employer had a policy against employees having facial hair.

The employer asked Roger to shave off the beard, but Roger refused because he felt it was an infringement on his personal freedom, and, more importantly, no one ever gave him a good reason why this rule existed. As a result, the employer fired Roger.

There are no winners here. The employer lost a good employee and the employee lost a good job. The employer will now have to spend more time and money to replace the employee.

In the example above, the employer, upon noticing the employee's reluctance to shave the beard, should have explained why it had the policy against beards. It might have been enough to make the employee change his mind. If the employer could not come up with a good reason, it shouldn't have had the policy in the first place.

Making Sure Rules Aren't Perceived Negatively.

There are a number of things that can be done that will go a long way to help make sure that work rules aren't perceived to be unduly restrictive, including:

  • Getting input from your employees in creating work rules: if they are involved in the process, employees are more likely to accept and abide by the work rules.
  • Again, having rules that have a sound business justification will not only make the seem more appropriate, but it may help you avoid creating rules that have a disparate impact on certain protected groups of employees.

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