How To Write An Effective Employee Handbook

What if there was one tool that could keep all of your employees on the same page, knowing exactly what you expected from them?

That’s exactly what an employee handbook does. Your handbook is your uniform message and your all-purpose tool.

FREE DOWNLOAD: To get started on your employee handbook, download our Employee Handbook Outline now. It’s one of the many great documents available for free in our HR Resources Toolkit.

It helps you avoid miscommunication with your team by laying out in clear terms what your business is about and what you expect from employees. It gives every employee the same foundational understanding of what your business is all about. It gives employees a place to turn when they have questions ard need guidance on what to do when situations arise in the workplace. It provides legal protections for both you and your employee.

Yet many businesses don’t have an employee handbook. What’s their excuse?

  • They think they are too small and don’t have enough employees to justify a handbook.
  • They don’t have anyone with the skills to write one.
  • They don’t want to spend money for an attorney or HR specialist to help create one.
  • They think it will hurt the casual and “pleasant” small-time feel of their business.
  • They want to allow managers the ability to interpret policy rather than have it written in stone.

Those sound like good reasons, right? But they’re not. An employee handbook both protects you and your employees when things in the workplace get difficult. The Small Business Administration has some great thoughts on creating an employee handbook. Here are some tips to get you started.

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What To Include In The Handbook

An employee handbook covers the obvious, the seemingly mundane, legal requirements, and the tricky behavior issues, all at once.

1. Who you are.

Start your employee handbook with an introduction to you and your business. Let employees know a brief history, and understand who you are and what you’re all about. This is where you will share your business philosophy and culture.

2. Work, pay, and benefits.

The next sections of your employee handbook will outline the things employees are generally most interested in (which is why you put them at the start of the handbook).

Hours: Provide details on expectations for both full-time and part-time employees when it comes to the hours worked. Let employees know about overtime, including who is eligible for it and how they go about getting compensation for it.

Pay: Share all information on pay for hourly, salaried, full-time, and part-time employees. Include information on things like bonuses, such as how employees can earn a bonus, or the circumstances through which bonuses are distributed. Talk about pay increases, and when and how that occurs. Let employees know that you will be making the necessary federal and state tax deductions so that they understand the difference between their stated pay and their take-home pay. And don’t forget to tell them how often and when they will be paid! Employees need to know when they are to expect their paycheck.

General employment: Talk about any employee referral programs that you might offer, as well as topics such as how and when you post new jobs, termination and resignation policies

Benefits and leave: Lay out the details of the benefits your full-time and part-time employees are eligible for. This includes things like health insurance, retirement, and vacation, but also the rules and guidelines for sick leave and vacation pay. You likely have official documents regarding many of these benefits (e.g. health insurance) from these outside providers, so be sure to refer your employees to these documents, and be sure to make these documents available to your employees. You don’t have to include these outside documents in full in your employee handbook.

You should also inform employees of leave policies in regards to military service, disability, crime victims leave, voting leave, bereavement leave and so on. In other words, if you have a leave policy, write it down clearly and let employees know what it involves. Be sure you comply with any laws regarding leave.

3. Legally required information.

There are some topics you must include in your employee handbook, as required by law. These include:

Family medical leave policies: The Family Medical Leave Act requires that employers, depending on the size of their business, provide up to 12 weeks of unpaid leave during a 12-month time period for the birth or care of a child, or for serious health issues of the employee or a family member they must care for. Your state may have additional requirements, too.

Non-discrimination policies: Each state has their own laws regarding discrimination and equal-opportunity employment, but the federal government also lays out some laws, too. Your handbook should reflect both of these as well as refer employees to applicable legal information provided by the federal and state government.

Workers compensation: Workers compensation policies, according to state and federal law, should be clearly outlined, as well as what employees should do to claim compensation.

4. Safety issues.

Safety issues range from physical safety using tools and machines at work to personal and emotional safety in the workplace.

Drug and alcohol use: Many workplaces have policies regarding drug and alcohol use, some of which include drug testing. Be sure to clarify what employees are allowed to do both to avoid losing their job (e.g. no illegal drug use) as well as what they should avoid while on duty (e.g. no alcohol while on duty). You will probably want to include a smoking policy; some cities and states have laws that prohibit smoking in the workplace. Be sure to comply with these laws.

Safety: You already know you need to comply with OSHA standards, but outlining your safety policies and approach is wise. Both explain your policy as well as provide instructions for employees to report unsafe incidents so that they are dealt with. Safety information ranges from equipment use to what to do when there is dangerous weather and employees are either at work or can’t get to work.

Harassment: Policies regarding harassment include sexual, verbal, bullying, or electronic. This also includes a discussion on being civil to each other in the workplace, and not instigating problems among other employees. Establish your no-tolerance policy for harassment, explain what harassment is, and let employees know what they are to do if they’ve been harassed.

Complaint Procedures: You will want to include instructions for what employees are to do if they have a complaint. By not allowing for a procedure to handle complaints, you open yourself up to the problem growing bigger, possibly into harassment, and exposing yourself to legal problems. Be clear that no employee will face retaliation for bringing a complaint to management, and instruct them on what to do with their complaints to start the official process.

5. Your expectations.

Discuss what you expect from your employees regarding work schedules, requesting time off or vacation, and punctuality. You will also want to address daily breaks, meal breaks, dress code, language use. Let them know what standards you expect from your team in terms of honesty, customer service, and fellow employee cooperation.

Computer and internet use: A category many employers don’t think to cover is what you expect from employees as far as computer and mobile phone usage. Do you have policies on personal use of mobile phones or work computers while at work and on the clock? Are there security issues that need to be addressed in regards to computer use? What about public relations, and how employees behave on social media or other public-facing accounts that customers could find? Computer and internet use (and abuse) are important to address, depending upon what type of business you run.

NDNA and conflict of interest: Depending on your business, you may require your employees to sign a non-disclosure agreement (NDNA). Explain any conflict of interest policies you have, and what constitutes a violation of these policies.

Disciplinary Actions: Part of laying out what you expect is letting employees know that there will be discipline when these expectations are not met. However, avoid the temptation to go into too much detail in this section.

The more detail you provide, the more likely it is you’ll leave something out.

If your approach is more general, then it will actually cover a broader range and give you the flexibility to address issues rather than if you attempted to outline every single possibility. Progressive discipline often works in most cases, but there are times you need to fire an employee as soon as possible. It’s best to make it clear that breaking rules and policies will result in a disciplinary process, but not lock yourself into too much detail.

6. Caveats.

It is important to note in your handbook that the document is not a contract promising continued employment (more on that next). Instead, it is a handbook that is the final say regardless of any previous documents on policies.

You should also note that policies are subject to change and that there may be additional behaviors not expressly mentioned in your handbook that are subject to what’s laid out in your  handbook; you can’t possibly predict what future issues might arise that need to be addressed, so including this gives you some leeway to act.

What To Leave Out

There are some things you ought to leave out of your employee handbook according to HR Daily Advisor, because they can get you into trouble when drafting your handbook. Here are some phrases to avoid using:

  • Just cause. Not every state has the same legal requirements. At-will states do not require employers to have a cause or reason to terminate or discipline an employee, so including language such as “just cause” in your employee handbook makes things difficult and confusing for you.
  • Permanent position. Never use the phrase “permanent position”, because it suggests to employees that their position is a sure thing when it is not. Again, this ties into the idea of “at will.”
  • Due process. Avoid make reference to “due process” in regards to disciplinary action or in handling employee disputes. Again, you’re making things more difficult for you than you are required to. Outlining a rigid disciplinary process that must be followed every time means you may have difficulty firing an employee who truly needs to go as soon as possible without dragging out the process. Always allow yourself the option to fire at will as much as you are legally allowed.
  • Probationary period. As an employer, you may think of an employe starting off as being in a probationary period, but that language creates the expectation for the employee that once that time is over, they are permanent. Using “introductory” is better language, since it allows for the idea that employees are still employed “at will.”

Get A Legal Review

As you can see, simple phraseology or language can get you into trouble that you didn’t expect, so have your completed employee handbook reviewed by your attorney before putting it to use. Or, contact an attorney with specialized skill or knowledge in HR or the workplace.

While it will cost you, it is a necessary expense. Your attorney can tell you if the language is appropriate, and if the policies you’ve outlined in your handbook are within legal bounds. If your business operates in several different states, you may need to adjust your employee handbook to meet the laws of each state. Because your employee handbook might be pivotal in any future issues with employees, it is imperative that you make certain the language that you use legally protects yourself or other employees.

Distribute The Employee Handbook

Now that you have your employee handbook written, put it to work.

An employee handbook must be distributed to each employee in order to be of any use. Every employee should receive the handbook upon hiring, and you should have a document for them to sign that indicates they have received, read, and understood the employee handbook. This document should be kept in their employee file.

Keep copies of the employee handbook where all employees can access it easily, whether in paper form or a digital copy. And then, when an issue arises, follow your own handbook. Periodically review your employee handbook to make sure it is still accurate and relevant for your business. If you find employees are asking you a question repeatedly and that you haven’t addressed it in your employee handbook, it might be a point that needs clarification.

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