As another year begins, it's important for employers to review their employee handbooks in order to keep up with compliance as well as the latest HR trends.
Here is everything you need to know about updating your employee handbook for 2027.
How to Review Your Handbook
When reviewing your employee handbook as a new year begins, there are two key areas to focus on: compliance and company culture.
Compliance, though complicated, is rather straightforward. Do you have policies in place? Are they compliant? Are all required inclusions in your handbook?
Company culture, on the other hand, requires careful consideration and a great deal of thought. These components aren't required but are important in order to make your business appealing, keep your employees satisfied, and ensure you're competitive in your market for talent.
Here is a guide on reviewing your employee handbook for compliance and company culture for 2027. Companies may want to consider an HR SWOT Analysis as their method for reviewing the following:
2027 Employee Handbook Compliance Updates
There are five areas in which employers and HR teams should review their employee handbooks for compliance updates in 2027:
- Anti-Harassment Policies
- Employee Classification and FLSA Overtime Exemptions
- Parental and Family Leave Policies
- Remote Work and Hybrid Policies (Recommended if Applicable, Not Required)
- DEI Initiatives
- AI Governance and Usage
- Review State and Local Laws
Before you begin your review, it's important to note how many full-time employees you have, and how many you had in the year prior. As your organization grows, so does the list of applicable laws and policies to include.
Reviewing Anti-Harassment Policies in 2027
Incidents of harassment in any form can be harmful to an organization in many different ways, and a proactive approach is the best way to combat this.
Each year, employers and HR teams should review their anti-harassment policies and company requirements, including:
- The definition of harassment in their handbook
- Ensure the definition is up to date with all federal, state, and local laws
- The procedures around harassment
- Ensure that the reporting procedures for incidents are compliant and still work (i.e. if someone in the process is no longer with your company)
- Ensure that policies on investigations are compliant
- Training programs
- Ensure that mandatory trainings are stated and explained thoroughly in your handbook
Certain states may also have their own guidelines and requirements for sexual harassment prevention in the workplace. It's key to not only adjust your handbook to state and local laws, but to also be aware of and comply with your state's sexual harassment prevention laws. As an example, Connecticut requires employers to conduct an approved Connecticut sexual harassment training program each year for their employees to help prevent workplace incidents.
Reviewing Employee Classification and FLSA Overtime Exemptions in 2027
Compliance around employee classification and overtime exemptions has been a whirlwind over the past year or so. As such, this is a crucial part of your handbook to review.
Some states have their own overtime exemption salary threshold requirements. If this applies to you, review to see if there was an increase for your state.
If not, it's important to review the most recent FLSA Federal Court ruling and the new overtime exemption requirement as of November 2024, and understand who in your company is classified as exempt and who is not.
Reviewing Parental and Family Leave Policies in 2027
This is another crucial one, as many companies can go from no requirements to a big one in a blink, as many leave laws, both federal and local, rely on employer size.
For instance, employers with 50 or more employees are covered by the Family and Medical Leave Act (FMLA).
It's important to review any state laws as well and see if they apply to your business, especially if your organization has grown. Additionally, states quite frequently pass new leave laws (usually a couple each year), so there may be a new requirement that you have yet to include in your handbook.
Reviewing DEI Initiatives in 2027
Since early 2025, the current state of DEI initiatives in the workplace has been put in question as federal-level DEI practices have been restricted. While the federal executive order against DEI initiatives doesn't make DEI inherently illegal for private employers, the change at the federal level started a chain reaction of private employers beginning to roll back existing DEI initiatives.
Because employee handbooks often include discrimination policies that can relate to DEI initiatives, it may be worth reviewing the language used to ensure it aligns with current Equal Employment Opportunity Commission (EEOC) standards.
When reviewing your employee handbook, consider the following:
- Rephrasing or removing DEI-specific mission statements
- Adding in more neutral merit-based statements
- Ensure mentions of employee resource groups have language that invites all workers to be included
- Retain core EEO requirements, such as anti-harassment policies and rules under Title VII
AI Governance and Usage in 2027
It's no surprise that AI usage in the workplace has skyrocketed since AI's introduction, though employers and even lawmakers are still evaluating the ethics of its widespread use. While there is currently no federal legislation relating to AI usage in the workplace, many states have already begun drafting laws surrounding the topic or, in some cases, certain states have already passed AI-restrictive legislation.
For example, the Connecticut AI Responsibility and Transparency Act (CART) restricted the usage of AI tools for the recruitment and hiring process while also requiring employers to clearly communicate their usage of AI or release notices to employees if mass layoffs occur due to AI-related changes,
While not every state has the same rules for AI governance, nor does every state have laws surrounding the topic, it's still essential to review or add basic AI usage policies in the workplace as the technology grows.
Your company may want to consider the following regarding AI in the workplace:
- Whether AI tools should be allowed for general use in the workplace
- Approved and unapproved AI tools
- Restrictions on certain information or data that can be used with AI tools
- Points of contact in the workforce that control AI governance rules and information confidentiality
- How your company wants to disclose the use of AI in the workplace
- Review state or local laws that have specific employer requirements regarding AI use
Reviewing Remote Work and Hybrid Policies in 2027
While remote and hybrid work has been quite normal since the COVID-19 pandemic, more companies every day are formally adopting the practice. Even if they ended the practice post-pandemic, many are re-implementing it in order to stay competitive in their talent market.
Many companies, however, don't have thorough policies around remote and hybrid work. Employers and HR teams should review these policies, or implement them entirely, with the following in mind:
- Availability and work hours
- Ensure expectations are set for working hours and availability for remote and hybrid employees
- Company-provided equipment / technology
- Ensure expectations around company-provided equipment and technology, such as responsibilities, IT support, and IP security
- Set expectations for communication
- It's important to include expectations for communication and engagement for workers in a remote or hybrid work environment
Keeping these expectations in place not only helps protect you, but also helps to ensure a productive hybrid workforce or remote workforce.
Review State and Local Laws in 2027
Lastly, it's important for employers and HR teams to review any new compliance updates or laws in their state and ensure that they are reflected appropriately in their employee handbooks.
Because there are so many states and localities that frequently update labor laws, particularly as a new year starts, it's essential for employers to stay up-to-date with the latest legislation updates that can affect their business compliance strategy. Employers can subscribe to an HR compliance newsletter that updates them on the latest labor law changes across the nation.
2027 Employee Handbook Company Culture Updates
As 2027 nears, new HR trends surrounding company culture arise. And some of them may affect what you want to include in your employee handbook, as creating a company culture for employee retention is crucial in an era of increased job hopping.
Some HR trends that may warrant inclusion in your employee handbook in 2027 may include remote or hybrid work and AI use in the workplace, as mentioned above, but also include managing employee well-being and stress.
Employee Well-Being, Stress, and Mental Health
Employee well-being, stress, and mental health are among the most important topics in HR heading into 2027, as employee burnout increases each year. A study from the Gies College of Business at the University of Illinois shows that a staggering 61% of employees struggle with engagement, motivation, and fulfillment in their roles. For employers, this means a greater focus on employee mental health awareness, and support is crucial for retention, engagement, and overall work-life balance for your people.
As such, many companies are implementing and have implemented initiatives around caring for their employees' well-being. Whether you have such programs or intend to start one, an employee handbook is a good place to remind employees that they exist and how to access such benefits.
Have Your Employee Handbook Reviewed Professionally
When January 1, 2027 comes around, employers shouldn't have to be scrambling to adapt their policies to the latest compliance requirements. Not only does it take a considerable amount of time to review an entire employee handbook yourself, but the last thing you want is also to have a compliance issue arise because your handbook failed to reflect the latest requirements.
Fortunately, experts who provide HR consulting services are there to help employers review, update, and distribute employee handbooks so that they're 2027-ready. Looking for assistance with reviewing your employee handbook? Contact us today to learn how we can help.
