Some people view employee handbooks as an antiquated practice from a past business era, but nothing could be further from the truth. A well-written, compliant employee handbook continues to be one of the best employee relations tools for businesses of all sizes. It helps create an environment of mutual respect and cooperation in the workplace, and it can also help establish an affirmative defense for your company in the event of an employee lawsuit.

Every business should create an employee policy manual

The employee handbook is a manual of policies that communicates company’s expectations for employee conduct to workers at every level of your organization. In compliance with Department of Labor requirements, a handbook informs your employees of company policies and protocol as well as their rights as employees.

Many small business owners don’t believe their companies are large enough to require written policies. That’s a misguided belief that can put your business at risk. 

Information and workplace policies to include in your employee handbook 

Every corporate handbook should be unique, but compliance requirements dictate that they share many things in common. Without getting too detailed, consider these areas of policy and compliance as you plan and develop your employee handbook:

  • Welcome to employees

  • Culture and values (the “Why” behind your business)

  • Standards of conduct / Code of ethics

  • Equal Employment Opportunity statement

  • Contractual Disclaimer and At-Will Statement

  • Hiring, onboarding

  • Anti-harassment / anti-discrimination 

  • Complaint procedures

  • Payroll, overtime, compensation

  • Worker’s Compensation

  • Unemployment Insurance

  • Paid and unpaid leave, including FMLA

  • Disabilities, ADA

  • Benefits, including COBRA 

  • Employee safety

  • Attendance, work hours, breaks

  • Dress code

  • Social media code

  • Workplace violence, weapons, drugs, alcohol

  • Performance reviews, bonuses, promotions, transfers, 

  • Progressive discipline

  • Termination, layoffs, offboarding

Build an effective employee handbook in 9 steps

Having an employee handbook is an important part of setting out the rules and expectations that drive company culture and a productive workforce. Don’t delay the process of standardizing and formalizing your employee policies. Start creating or updating your employee handbook using these nine tips:  

  1. Review samples and templates but make your handbook your own.  You don’t have to completely reinvent the wheel in order to come up with a solid handbook. It can be helpful to review some samples from other companies. One sample handbook is offered for free by the Society of Human Resources Management (SHRM). You can also download handbook templates to help you get started. Remember, this handbook needs to reflect your organization’s code of ethics, code of conduct, and company culture. Don’t rely so heavily on a template that you fall into the trap of filling in the blanks resulting in a cookie-cutter handbook of no real value. 

  2. Gather your policies and make an outline. If your policies have mostly been expressed verbally in the past, now is the time to write them down. Address the compliance requirements for a business your size through policies within your handbook. Create an outline that includes all of the policies you’ve gathered as well as sections for the areas we listed in the section above. Use this as your roadmap as you start to write the handbook.

  3. Keep it simple and write in easy-to-understand language. If employees don’t understand what you want from them, your handbook won’t fulfill its purpose. The easier it is to understand your policies and procedures, the easier it will be for management to enforce the rules. If any policies seem ambiguous or confusing, you will find yourself either spending inordinate amounts of time explaining the confounding policies or making exceptions to those rules. Instead, take note of policies that are causing confusion and either eliminate them or rewrite them in a handbook update.

  4. As much as possible, avoid “legalese.” While your employee handbook is a legal document, it’s primary use is…as a handbook. It’s important that employees can find the answers they need quickly and easily. Heavy-handed legal verbiage can seem intimidating and inaccessible to many employees. Let’s face it, most legal proceedings are adversarial, with parties on opposing sides. That’s not how you want your company culture to feel, so you should avoid making the employer/employee relationship feel that way in the language of your handbook.

  5. Review the handbook internally. Before you send the handbook out for external legal review, take time to have management read the entire manual carefully. Compare it to your original outline–is anything missing? Does the tone feel right? Are any sections confusing? Revise where necessary.

  6. Get your handbook reviewed by an employment law attorney. Your handbook could be scrutinized in a legal proceeding such as a government compliance review or an employee lawsuit. The policies it sets down have to be in compliance with federal, state and local employer law. These laws change frequently. You should have an employment attorney review your completed handbook before you publish or distribute it. 

  7. Train managers on the content. It is essential that your managers apply the policies in the handbook consistently across the entire workforce. There can be no exceptions—especially with infractions that require disciplinary action in the handbook. If one employee gets away with breaking the rules, that can create resentment and an appearance of favoritism. It can also open your business up to a claim of discrimination by employees. To avoid this situation, train your managers about all of the policies outlined in the manual before distributing it across the organization.

  8. Distribute the finalized handbook to every employee. Most businesses provide a copy of their employee handbook to each new hire as they are onboarded. If you’ve written a new (or updated) handbook, it should be distributed to every employee. You should also conduct a training session(s) to explain HR policies to the entire workforce. You can distribute the handbook in a printed format or host it digitally on your company’s network. Whatever form of distribution you use, collect a verification of receipt for each employee and keep these on file. Receipts help you prove employees received the handbook and help document their training for understanding of its contents. This can become important during employee complaints or future legal proceedings. 

  9. Regularly review and update the handbook. Every year, you should review your handbook against any changes to compliance requirements. Pay close attention to compensation, discrimination, harassment, family and medical leave, and break policies. If you make changes to policies, call out the changes in an all-hands communication.

When to get help from a human resources consultant 

Business owners focusing on growing the business and managing day-to-day operations may lack the time and/or human resources compliance knowledge to put together a good employee handbook. If this is the case for you, you may want to explore how HR Services can provide the human capital management expertise to produce policies and procedures that support business growth and maintain compliance.

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