What is an Employee Handbook

An employee handbook is a collection of a company's policies and rules of conduct.

A typical employee handbook focuses on policies to follow and lists out what employees cannot do. The employee handbook helps to protect the legal rights and responsibilities of the business, the business owner, and the employee. The employee's rights are sometimes left out of the employee handbook.

An employee handbook can also be used to give a new employee a great first impression of the company. The employee handbook can communicate the company culture and positive benefits as well as policies.

The employee handbook makes sure that each employee understand the expectations of the company. This understanding allows each person to work together as a cohesive team.

The employee handbook can help prevent miscommunication with the team. Typically, a new employee is required to read the manual in the first few weeks after being hired. A signature is required for proof of understanding.

If the employee has any questions about policy during her employment, she can refer to the employee handbook. The employee handbook provides guidance. If the employee handbook doesn't address the concern, management can be approached.

Other Names

An employee handbook is also called an employee manual, a business employee handbook, and a policy and procedure handbook.

There may be other variations on the title of this document, depending upon the company.

Excuses for NOT Having an Employee Handbook

Many companies may provide excuses for not having an employee handbook.

  • We're too small to justify the creation of an employee handbook.

  • We don't have the skills to write an employee handbook.

  • We don't have the money to hire an attorney or HR specialist to create an employee handbook.

  • We think an employee handbook will harm the "casual and fun" environment of our small business.

  • We want managers to interpret policy instead of having detailed, written policies.

An employee handbook protects the rights of the business and the employee. There isn't an excuse to not have an employee handbook. An employee handbook makes policies clear, easy to enforce, and answers difficult questions.

What Should Be Included in an Employee Handbook?

An employee handbook can be an extremely dense document. The larger your company, the more potential there is for problems. The more potential problems, the more complex your employee handbook needs to be.

A successful employee handbook clearly communicates policies, protects the business and the employee, and is easy to read. Your employee handbook should reflect the culture of the business community.

What is communicated and how it is communicated can make all the difference in an employee handbook.

There are certain policies that are required by law to be in the employee handbook. This might mean reviewing local, state, and federal employee policy when creating your employee handbook.

Different Types of Facility

If you have more than one type of facility in your business, you may want to create more than one type of employee handbook. Employees at a manufacturing facility will benefit from different policies than employees at a sales or research facility.

A core handbook can be created that can be used across the entire company, but a supplement unique to each facility is beneficial. Specialized employee handbooks are beneficial in helping employees understand their role within the company. This applies if employees are paid on different scales, such as a salaried worker and an hourly worker.

Additionally, consider including eligibility, indroductory periods, transfers and relocations. Also, include information about referrals and job classifications. You should also include information about Union benefits if it applies.

Employee Handbook: What's Required by Law

There are certain elements and policies that are required by law to be included in an employee handbook. These required elements may determine how your employee handbook should be organized.

You can find more information about these legally required federal policies from the Department of Labor's website. If your business operates in multiple states, you may need to write multiple versions of the employee handbook.

Federally Required Employee Handbook Policies

The following policies are required to be included in the employee handbook.

Family Medical Leave Policies

Federal law under the Family Medical Leave Act requires that employers provide 12 weeks of unpaid leave during a 12-month period. This is for the birth or care of a child, care of an immediate family member, or a serious health condition. The federal law is supplemented in some states with state law.

Equal Employment Policies

A statement must be posted that the business equal opportunity and non-discrimination laws in hiring and promotion. This policy should explain the discrimination includes:

  • Age

  • race/color

  • Religion

  • Pregnancy

  • Disability

Laws that protect discrimination are enforced by the Equal Opportunity Commission. You can include here a phone number or website where employees can seek more information or file a complaint.

Worker's Compensation Policies

Under some state's laws, worker's compensation policies must be posted in writer. This might include accommodation for disabilities, military leave, breastfeeding, and crime victims leave.

Disclaimers That Should Always be Included in an Employee Handbook

There are a few policies that are important to include in an employee handbook. This policies are not required by law to be included. These policies are important to include for the protection of the business, owner, and employee.

Not a Contract

An employee handbook is just a policy guide. The handbook doesn't make a promise of continued employment. This can also include a statement of employment such as, "This is not a contract. We hope to work together for a long time, but out employee/employer relationship can be ended at anytime, for any reason, with or without notice. You or the company can end the relationship."

Above All Previous Policy

This statement makes clear that the handbook supersedes any previous policy document. The employee handbook is the best and final word on company policy.

Change is Possible

As times change and unconsidered issues come up, the employee handbook must be updated. It's important that there's a provision in the employee handbook that allows for update and change. Consider adding a statement that says, "These policies are subject to change. You may receive a modified employee handbook."

Employee Acknowledgement

To be sure that employees are aware of policy, include a page in the employee handbook that can be signed by the employee. Once signed, a copy of the signature and agreement of receipt should be copied and saved. The acknowledgement statement should include that the employee has read and understands the policies provided in the employee handbook.

Other Policies to Include in Your Employee Handbook

Your employee handbook should reflect the personality of your business community. This means that your employee handbook should be unique to your office culture. When preparing an employee handbook, take time to consider what is most important to your company. Design the employee handbook around what is important to your business.

This is also the time to decide what tone you want to use in your employee handbook. Most employee handbooks are formal documents that take and academic or boring tone. This is an important document and a formal tone is not a bad, as long as it fits the culture of your office.

The tone for a law firm's employee handbook is going to be very different from the tone of the employee handbook at a tech start-up.

Tone can also be set by the language that is used. Many handbooks focus on what employees shouldn't and can't do. Consider including sections that use positive language, what employees should and can do.

If you create your handbook to reflect your business, enforcement should be simple. Be sure to equally and fairly enforce the policies laid out in your employee handbook.

Online Conduct

Consider including a section on how your employees should conduct themselves online. This can include how employees talk about co-workers, bosses, and the company on social media or other websites. This should include a policy for addressing employees who improperly use company computers and email addresses.

Cell Phones

If employees are provided with a company cell phone, strict policies must be written into the employee handbook. The employee handbook can also include a section on when it is appropriate to use personal cell phones and make personal phone calls.

Social Media

Consider including a policy on appropriate social media use. This policy can include provisions on when to use personal social media, how to talk about the company on social media, and how to use company social media.

Communication

If there is a preferred method of communication, phone or email or text, that should be included in the employee handbook. This document is helping new employees to quickly and comfortably adapt to the work environment.

Be clear that all other policies are enforced within the communication policy. Harassment and discrimination aren't allowed in any form of communication.

This policy can cover not only the preferred mode of communication but also the method of communicating.

Company History

Consider including a section on company history. This won't include any policies. It will welcome new employees to the company. It will help them learn about the founding principles and cultural aspects important to the company.  Remember, the employee handbook is the first impression that new employees receive about the company culture.

This is a place where you can include biographical information about the company founder's or current owners. Providing information about customers or audience help the new employee to understand the company's place within the marketplace.

Paid Time-Off

This is the vacation policy. A clear vacation policy will make enforcement simple. The paid-time off section should include information on how vacation time is earned. Include how much vacation time is provided and how to schedule vacation time. Also include what holidays are observed in this section.

If employees might be asked to work on holidays, provide the special pay rate here.

Employee Behavior

This section can cover a wide range of acceptable and unacceptable behaviors by employees. Here are some suggestions to include in this section:

  • Attendance policy

  • Meal breaks

  • Rest breaks

  • Co-worker harassment (physical, sexual, or emotional)

  • Smoking ban

  • Substance abuse policy

  • Dress code

  • Grooming standards

  • Internet and email use

  • Conflict resolution between coworkers

  • General expectations

It's important to provide specifics in this section, but to also leave space for unconsidered problems. Provide here a complaint policy. If an employee has no way to file a complaint, the problem could get worse.

Pay and Promotion

Make clear here what the payment policy is. State when employees are paid and how they are paid. You can also give the promotion policy. Other areas to consider including

  • Overtime

  • Work hours

  • Pay grade structure

  • Pay hierarchy

  • Bonus

  • Stock options

Benefits

This is the section where you describe the benefits that are offered to employees. This should give a general overview of benefits, not specific details. Benefits may change frequently. Being too specific constrains the employee handbook and will require frequent changes.

This section should state who is eligible for benefits. Define what full-time and what part-time employees receive. Include some information about how benefits change with life events such as marriage or birth of a child.

Workplace Safety

Address here any policies that concern the safety of the employees and assets. This can include physical, personal, and emotional safety. This is the place to outline OSHA standards and any other important safety policies.

You can include a set of instructions for reporting unsafe incidents here as well. If there is no complaint procedure, employees might be scared to communicate a problem. This could make the problem worse.

Ethics

If your company has strong policies on the ethics that must be followed while conducting company business, be sure to include those in the employee handbook.

Employment and Termination

This section may not contain a lot of specifics, depending on company and state policy. Provide as much information as possible as to the reasons an employee might be terminated. This will also explain how to accept employment.

Conflict of Interest and Non-Disclosure

If it is required for your business, you can explain the non-disclosure or NDNA agreement here.

This section should also include any policies your company has on conflict of interest violations.

Disciplinary Policies

If policies are set forth, so must the actions taken when policies are broken. This section should give a broad disciplinary policy. There's no need for details here. The more detail that is provided, the more likely you are to leave something out.

A general approach will give a broader range of protection and flexibility.

Caveats

No employee handbook can exhaustively list every item the could be of concern. This section should address that the employee handbook is a guideline and not a complete list or collection.

You can add here that the policies included in the handbook are subject to change. Also include that there might be additional behaviors that are considered unacceptable.

Keeping this section broad helps to address anything that comes up in the future or anything that isn't addressed explicitly in the employee handbook.

Policy Violation of Employee Handbook

It's important to include some information about what an employee would do if they see a violation of the employee handbook. It should also explain the complaint policy.

Give a clear process of how a complaint can be filed, who the employee should talk to and what the steps are for resolution.

Make clear that employees will not be punished for filing a complaint. Be clear that complaints will be kept confidential and fully investigated. All concerns will be dealt with appropriately.

You may want the employee to contact the human resources department or a manager to resolve the issue. You may want to include a mediation policy.

You can also include information here for federal or state agencies that help to protect employee rights.

This is one of the places you can give your employees protection and a sense of safety.

Why is an Employee Handbook Important?

An employee handbook can play a large role in your company culture or it can largely be ignored. No matter the size of your company, an employee handbook can play an important role.

The employee handbook lays out the internal rules and company culture. This can save you time when training new employees. It also makes sure the every employee functions under the same guidelines and works as a team.

The employee handbook can also work to protect both the business and the employee. An employee handbook protects the company from potential litigation. A well-crafted employee handbook can protect the employee from being taken advantage of by the employer. A successful employee handbook protects both the employer and employee.

Ways to Make the Employee Handbook Readable

Most employee handbooks are not enjoyable documents to read. Most are jargon-filed and boring. There are a few steps you can take to make your employee handbook more enjoyable to read.

This is, of course, dependent upon your company culture. If your company has a formal culture, an academic employee handbook might work well. For younger, less formal companies, this is not as effective.

Here are a few suggestions on how to make your employee handbook less formal.

Give it a Name

Start it off right by giving your employee handbook a creative name. The title of your employee handbook should be a reflection of your company culture. Get employees curious to read and find out what is inside.

Start With the Mission

Start off your employee handbook with some interesting information. Include the founding story, the company mission, or interesting facts about other employees. The mission should reflect why employees come to the office everyday. What is everyone working towards? What do your employees care about?

Company's Values Personified

Create policies that personify the values of your company. Instead of just listing what employees can't do, talk about the company culture, personality, and values.

Your employee handbook is your internal platform. Help new employees to quickly assimilate to the company culture. The dress code can even be included here. Frame it as the way you communicate and show respect between coworkers and with clients.

Promote the Perks

Give lots of information about employee benefits and perks. Include information about the company culture on work/life balance, public service, and improvement programs. Working for the company is about more than the paycheck. This is the space to sell your company culture.

Most of the employee handbook talks about what the company expects of the employee. Turn it around. Say what the employee can expect of the company.

Present It

Instead of sending the employee handbook as an email attachment, present to your new employee. Make the presentation something special. Show them how much the policy and handbook mean to the company by your treatment of the employee handbook.

You can also keep copies of the employee handbook in the office. Making sure that the company policy is accessible and readable in the employee handbook means it's more likely to be used and respected.

What NOT to Include in an Employee Handbook

Just Cause for Termination

Each state has unique rules for termination policy. Be sure to research the rules of your state and include the information in your employee handbook.

Some states do not require employers to have a just cause or reason to terminate an employee. If your business is in one of those states, don't include "just cause" phrasing. This could cause problems later on.

Due Process

If you refer to due process in conjunction with disciplinary actions, it can make the process more complicated. There's no need to over complicate the policies.

Probationary Period

Starting an employee on a probationary period gives the expectation of permanent employment once the period is over. Use other language to avoid that confusion and expectation.

Don't Promise Job Security

Avoid the express promise or implication of promising job security.

Don't Set a Course of Action

An overly rigid system can make things more complicated. Leave space for the policies to be flexible when necessary.

Employee Handbook Legal Concerns

There are many legal concerns when it comes to creating an employee handbook.

Review by Lawyer

Once your employee handbook has been completed, have a lawyer review the language. A review by a lawyer could save your company money in the future by avoiding lawsuits.

Required Material

Be sure that all legally required policies are included. This includes local, state, and federal policies.

Beware of NLRA

The National Labor Relation Act has provisions to protect employees. Review the National Labor Relations Board's compilation of illegal and legal rules to make sure our employee handbook doesn't violate the policies.

The National Labor Relations Board has mandated that employees are allowed to participate in "concerted activity" to better the work conditions and terms. Employers should make sure that their policies don't violate this.

The NLRB section 7 provides guidelines on writing legal policies on:

  • Confidentiality

  • Conduct towards the company and supervisors

  • Conduct between employees

Questions to Ask When Creating an Employee Handbook

When you're creating an employee handbook, there are some questions to ask yourself. These considerations should help to define and find company policy and culture.

  • How long must someone work to be considered full-time?

  • How often are employees paid?

  • Do you offer direct deposit or check payment?

  • Must employees sign an NDA?

  • What's the dress code?

  • What's the social media policy?

  • What benefits does the company offer?

  • What's your paid time off policy?

There are many other questions to ask and answer for inclusion in your employee handbook. These will help to begin the process and provide inspiration.

Reasons to consider using an Employee Handbook

An employee handbook is important to use to establish appropriate behavior and proper company culture. Establishing this in the handbook ensures that the work environment is safe, comfortable, positive, and healthy for all employees.

Ask For Help Creating an Employee Handbook

There is nothing wrong with asking for help when creating an employee handbook.

The language that is included in the employee handbook is important. There are subtle legal requirements that are necessary to use when creating employee policies which are included in the employee handbook. Precise language also make sure that the policies are clear and understandable to everyone.

When creating an employee handbook, you can seek help from the human resources department or from other trusted employees.

It is also simple and helpful to hire a lawyer. A lawyer can help create employee policies or review the final draft of the employee handbook.

Hiring a lawyer will increase the cost of the employee handbook, but it could save money in the long term. Lawsuits for illegal or unclear policies can be expensive.

Using the Employee Handbook

Once you have an employee handbook, don't just hide it as a file on the human resources manager's computer. Print a few copies and keep them around the office. Encourage employees to refer to the employee handbook for any company policy or culture questions they may have.

The employee handbook should be given to each new employee when the begin work at the company. This should include every employee. From the intern to the new c-level executive. Company policy and culture should be important to every employee.

Make the employee handbook a part of the culture of your company.

If you notice that the same question is being asked by multiple employees, it might be time to review and update the employee handbook. The employee handbook should be updated and reviewed periodically.

Other Important Employee Documents

  • Non-Disclosure Agreement

  • Independent Contractor Agreement

  • Employee Evaluation Form

  • Noncompete Agreement

If you're considering creating or revising your company's employee handbook, don't hesitate to seek the help of one of UpCounsel's lawyers. A lawyer can help you review the language and legality of your employee handbook. 

Frequently Asked Questions

  • What is an employee handbook?

An employee handbook is the document that contains all of the company policies and company culture information.

  • Who should have access to an employee handbook?

Any employee of the company should have easy access to the employee handbook.