How do you write an employee handbook for your small business? What do you need to put in it? Whether you’re writing your first employee manual or you’re updating one you’ve had for a while, this article explains the topics you should cover.
Employee handbooks should be designed to do more than just communicate information and answer routine questions; your handbook should help you achieve your organizational goals and objectives. Thus, while a list of rules of conduct and a summary of benefits are important information, you should evaluate your handbook on its ability to help your organization meet its objectives.
One purpose of your employee handbook is to help you attract and retain employees. Your employee handbook should help your employees answer — hopefully in the affirmative — two important questions: “Why should I work here?” and “Why should I continue working here?” If your employees are not receiving a positive message about your organization, your handbook is not doing its job.
Your handbook should also help convey useful information about hours of work, paydays, leaves of absence, and benefits. More importantly, your handbook should help create an atmosphere of trust and respect and give your employees a sense of belonging.
At the same time, your employee handbook must help you comply with your legal obligations and ethical requirements. It must also help you protect management’s right to make changes and adapt the organization’s policies and programs as needed.
Since your organization and its employees are affected by all of your written and unwritten policies and procedures, you should ensure that your employee handbook incorporates as many of your organization’s written and unwritten policies and procedures as practical. You must further ensure that your handbook communicates top management’s commitment to your policies. As a result, your handbook will promote consistency and assist you in preventing claims of disparate treatment.
You should regularly assess your employee handbook, not only from the standpoint of how well it communicates policies and procedures, but also from the standpoint of how well it helps you achieve your organization’s goals and objectives. Employee handbooks that fail to help your organization succeed in these areas should be rewritten.
Below is a recommended list of employee handbook topics:
Section One: General Employment Policies
This is where you deï¬ne the basic policies that explain how, when and where your employees are expected to work. You may want to include the following information in this section:
- Purpose of Handbook
- Vision and Mission
- At-Will Nature of Employment
- This Handbook is not a Contract Statement
- Reservation of Rights Statement
- Statement of Non-Discrimination
- Sexual and Other Unlawful Harassment Policy
- Disability Accommodation Policy
- Business Ethics and Conduct Expectations
- Ownership of Work Materials Policy
- Conflict of Interest Policy
- Whistle Blower Policy
- Access to Personnel Files Policy
- Non-Disclosure (Conï¬dentiality) Policy
All of these elements are important in their own way. Without a non-disclosure agreement, your employee could breach conï¬dentiality and have no idea that they were not supposed to discuss a topic outside of work. Without a conflict of interest policy, you might have an employee seek a business relationship with another organization that puts your operation at risk, yet have no recourse as your policy was not spelled out. Therefore, it is important to include most, if not all, of the sections above in your employee handbook.
Section Two: Employment Status
This is another category that is important in your employee handbook. You may want to include the following two sections:
- Introductory Period: if you wish to have a “trial” period for new employees, deï¬ne what that period will look like and how long it will last.
- Employment Categories: what does it mean for someone to be deï¬ned as temporary, part-time, full-time, exempt, non-exempt, etc.?
Section Three: Recruiting and Hiring
Your employee handbook should lay out the ins and outs of your employees’ legal obligations during their employment at your organization as well as your process for recruiting and onboarding. At a minimum, you need to cover your policy on eligibility to work in the U.S. The following categories are also recommended, but not required:
- Job Posting and Employee Referrals Process
- Employment Applications Process
- Employment Reference Checks Policy
- Policy on Employment of Relatives
- Relocation Expense Policy
- Process for Reemployment of Former Staff Members
- Employment Offer Policy
- Position Descriptions
- Promotion Policy
- Transfer Policy
Section Four: Compensation and Salary Administration
Include the following items in this section:
- Timesheet Policy
- Overtime Policy
- Pay Periods
These items are also recommended:
- Compensation Philosophy
- Pay Deductions and Setoffs Policy
- Direct Deposit Process
- Personnel Data Changes Process
- Administrative Pay Corrections Policy
- Compensatory Time Off Policy
- Pay Advance Policy
Section Five: General Workplace Policies
What time should I show up for work? What is the dress code? How many breaks can I take? Spell this out. In order to ensure the best work ethic and safe work environment, you may want to include the following sections in your employee handbook:
- Working Hours
- Attendance and Punctuality Expectations
- Safety Protocols
- Workplace Violence Prevention
- Smoking in the Workplace
- Drugs in the Workplace
- Security Inspection Policy
- Acceptance of Gifts, Gratuities, and Services Policy
- Authorization to Sign Contracts & Agreements
- Communication with the Press
These items can also be helpful:
- Work Breaks Policy
- Lactation Breaks Policy
- Emergency Closings Policy
- Flexible Work Arrangements
- Personal Appearance/Dress Code
- Open Door Policy
- Housekeeping Policy
- Visitors in the Workplace
- Children in the Workplace
- Staff Travel Recommendations
- Corporate Credit Card Policy
- Political Activity Policy
- Solicitation Policy
- Confidentiality Policy
Section Six: Employee Benefit Programs
You may want to include some or all of the following items in this section, depending on your specific benefits package:
- Benefits Overview
- Medical/Dental/Vision Benefits
- Flexible Spending Accounts
- Transit/Commuting Benefits
- Life Insurance/Disability Benefits
- EAP
- Retirement Savings Plan
- Statutory Benefits (Workers Compensation, Social Security, Unemployment)
- Education Assistance
- Benefits Continuation
Section Seven: Leave
By creating guidelines of when it is appropriate to paid time off (PTO), vacation, or sick days, your employees will be better able to manage their leave time. Include the following sections in your employee handbook:
- Holidays
- Vacation Policy
- Sick Leave Policy
- FMLA/State FMLA
- Military Leave Policy
- Jury Duty
The following items can also be helpful:
- Personal Leave Policy
- Bereavement Leave Policy
- Parental Leave Policy
- Medical Leave Policy
- Pregnancy-Related Absences
- Unpaid Leaves of Absence
- Court Leave
- Other State-deï¬ned Mandated Leaves
- Severe Weather and Emergency Situations
- Overtime
Section Eight: Organizational Property and Technology
Every organization is different as to whether they allow their employees to use their phone or computer at work, and whether they supply their employees with these tools. Include the following policies in this section:
- Document Retention Policy
- Phone and Mail Systems Policy
- Computer and Email Usage Policy
- Social Media Policy
- Smart Phone Issuance and Use While Driving
The following items can also be helpful in this section:
- Personal Property
- General Use of Equipment
- Internet Usage Policy
- Use of Cell Phones Policy
- Business Expense Reimbursement
- Company Vehicles
Section Nine: Employee Performance and Workplace Conduct
How do you expect your employees to behave while at work? What qualiïes as misconduct? What kind of performance is considered grounds for termination? How will employee performance be evaluated? Include these policies:
- Personal Relationships Within the Workplace
- Employee Conduct and Work Rules
- Progressive Discipline Process
- Problem Resolution Process
You may also consider adding the following items in this section:
- Outside Employment Policy
- Performance Evaluation Process
- Employee Relations
- Complaint Procedure
- Suggestion Program
Section Ten: Separation from Employment
Include the following items in this section:
- Employment Separation
- Return of Property
- Non-Compete and Conflict of Interest Policy
You may also consider including an item on references for current and former employees.
Section Eleven: Employee Acknowledgment Form
Employers often worry that their employee handbooks will be used against them in litigation. In particular, you could be concerned that employees will claim that your policies are contracts that must be followed exactly. However, the simple act of putting your policies in writing should not create a binding contract, if the policies are written as guidelines that explain “generally” or “typically” what your requirements are and how employees “normally” will be treated.
Label your “introductory period” policy carefully. Do not use the traditional phrase “probationary period” with its union security clause connotations. Instead, use you might want to use the term, “introductory period”, meaning that the new employee is being introduced to the organization and that both the employee and the company have the opportunity to evaluate fit.
Include a clear at-will statement in the policy. An example of an effective statement is: “Your employment with the Company is considered to be at-will, and the employment relationship may be terminated at any time by either party.” Make sure other policies also include appropriate at-will disclaimers. It is not enough to include the at-will statement just in the introductory period policy. You also should have a separate at-will policy and discuss the issue in other policies, such as those addressing hiring, termination, discipline, performance evaluation, and complaint resolution.
No matter the size of your organization, a well-written, up-to-date, legally compliant employee handbook is a best practice that will benefit you and your employees.
Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
