Writing an Employee Handbook

by | Small Business Consulting

An organization’s most important asset is its people, right? So it follows that you’ve finally, really made it as a company when someone mentions that you should probably put together an employee handbook.

Sure, an employee handbook might convey the message that your company intends to be around for a while, but there are also real benefits of working through the exercise.

Why Write an Employee Handbook?

Two reasons:

1.   Defining Rules and Expectations. Think of your handbook as a guide to the rules of the road for both yourself and your employees. It’s an opportunity to clearly express how your staffers should conduct themselves on the job, and how they will be compensated for their efforts.

2.   Protection for you. If your work rules and related issues are clearly defined, you’ll be in a better position later if employee-related legal problems appear. If you have to fire someone, for example, it might be in your interest to show that you followed disciplinary and warning procedures as outlined in the handbook.

What’s in an Employee Handbook?

Your company’s employee handbook will reflect the industry you’re in, your company’s size, and the nature of the typical employee’s status (full-time, part-time, seasonal, etc.), but several basic components are almost always included.

  • General Company and Employment Information

The handbook should include a summary of your company and its employment policies. These include job classifications, probationary periods (if any), termination and resignation procedures, union information (where necessary), and details regarding performance reviews.

  • Anti-Discrimination Policies

Your company must adhere to equal employment opportunity laws that prohibit discrimination. The handbook should include a section about these laws and make it clear that everyone in your organization must comply. For more information, visit the U.S. Dept. of Labor’s page on Equal Employment Opportunity.

  • Wages and Other Compensation

Although payroll information for a particular worker can’t be included, schedules for pay periods, and rules regarding overtime and holiday pay can be mentioned. Vacation and personal days, holiday policies, and eligibility requirements for medical, 401(k) other benefits should also be addressed here.

Make sure you explain that your company will always make required deductions for federal and state taxes, and also for voluntary payments for company-sponsored benefit programs.

  • Employee Leave Policies

A tricky area, as many matters that were previously left up to the company’s discretion, or included as part of a benefits package, are now mandated by law. Family medical leave, absences for jury duty, required military leave, and similar needs for employee time away should all be explained in the handbook, and implemented to comply with federal and state and laws.

  • Security (Theirs)

Your handbook should explain your commitment to providing a safe workplace, which includes adherence to federal and state laws regarding operating conditions. See the Occupational Safety and Health Administration’s website for details.

  • Security (Yours)

Make sure your expectations regarding employee alcohol and drug use – and pre and ongoing drug testing policies – are clearly defined. Check with your lawyer to ensure whatever procedures you put in place meet legal standards.

And while we’re talking legalities, if your employees are required to sign non-disclosure agreements to ensure your trade secrets and processes are protected, outline those expectations here. And make sure employees understand everyday policies regarding the protection of information, like locking down computers when not in use, and storing files in secure places.

Getting Started

Putting together an employee handbook doesn’t need to take weeks or months. A perfectly adequate handbook can be assembled fairly quickly.

Start with a prepared template. You can find these at office supply stores, or online. This template prepared by Entrepreneur.com is more than adequate for most early stage or growth stage companies.

Work through a first draft with your human resources director, if you have one, or another staff member with significant employee contact. Turn the draft over to a good employment or labor lawyer, and let him or her make sure it can pass any potential legal challenges of issues.

Finally, consider distributing the book in electronic format, where possible. This will make employment policies updates easier and less expensive to incorporate. Just make sure you document exactly when changes and revisions were made, in case there are questions later.


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