When creating your employee handbook, it is important to include a dress code policy that sets clear boundaries but also respects your employees' rights and beliefs. To avoid a hairy legal battle (pun intended) with an offended employee, here are a few things to consider regarding hair grooming.
True, it is legal to have an across-the-board policy on facial hair, including one that bans it altogether. However, certain disabilities prohibit people from being able to shave regularly. Additionally, some religious traditions have strictly-held beliefs about maintaining facial hair. In these instances, it is important (and much easier) to make reasonable exceptions rather than remaining rigid on the policy.
In theory, you could refuse to accommodate these employees if you feel it creates an "undue burden," but that is a very difficult case to make. Typically, you would have to prove that there is a legitimate safety, health, or security concern.
It is a similar case when it comes to hair length. Some religions forbid their members to cut their hair altogether, so exceptions would need to be made to accommodate those employees. While, again, it is legal to set a limit on hair length for men, an easier policy to enforce requires long hair to be simply pulled back and neatly groomed. Additionally, make sure the verbiage in your policy remains gender-neutral to avoid employees feeling like they are being treated disparately.
Brightly-colored hair is not a protected trait or class (e.g., race, sex, age). However, if it were part of a religious practice or common in a particular ethnicity, an employer would want to consider whether making an exception or accommodation would be appropriate. If neither of these were the case, there would be no issue enforcing a policy prohibiting brightly-colored hair.
However, remember that creative hair colors are more common and socially acceptable today, even in professional settings. Prohibiting brightly-colored hair could make finding or keeping talented employees more difficult. Having a sound business reason for your dress code and appearance policy is generally best.
If you decide to implement a policy like this, make sure that you apply it consistently. For instance, allowing one employee to have pink hair—when not a religious or other thought-out exception—but not another could create workplace drama and even open you up to discrimination claims.