What is an employee handbook?
An employee handbook is a document given to employees by their company, containing job-related information, such as policies, procedures, working conditions and behavioral expectations, which employees must acknowledge and accept.
An employee handbook should be viewed as the “go-to” source for company and personnel information – from your business’s reporting structure and regulations to policies and procedures like setting up a direct deposit and accessing a laptop.
And, while an employee handbook is not legally required in any state, it is an important reference as you work to create a safe, healthy and productive environment for all employees.
Creating and maintaining an employee handbook is a best practice for any business. A well-prepared handbook can answer many of the routine questions that would otherwise end up on the desk of your company’s human resources professional. When employees get in the habit of checking their handbook before going to a supervisor, it also saves management’s time.
An employee handbook is also a valuable tool for providing employees with the information that, by law, must already be delivered in writing, such as your American with Disabilities Act (ADA) and Equal Employment Opportunity Commission (EEOC) policies.
Other terms companies use to describe this essential tool are staff manual, company field guide, and company reference guide. However you choose to title yours, the information within it needs to be clear, direct and legally accurate.
What should be in an employee handbook?
Employee handbooks typically include information about the business. Many begin with a welcome letter from the business’s leader, reiterating the company’s mission, vision, purpose and values, as well as the business’s commitment to its employees.
It should then go on to cover key culture and policy topics such as:
- General employment information
- Anti-discrimination and anti-harassment laws
- Standards of conduct
- Employee benefits
- Confidentiality/Non-Disclosure Agreement/Conflict of Interest statements
- Employee and employer responsibility for safety
- Culture description that refers to your set of behavioral and procedural norms, ethics, code of conduct, etc.
- Local and national government policies
- Benefits and perks, including sick days, vacation time and information on the Family and Medical Leave Act (FMLA)1
- Disciplinary action methods, zero-tolerance harassment and discrimination policies, and in the states that have it, an at-will employment2 policy
General employment information
Outline the history and evolution of your business. Who started it? Why was it started? When did it open for business? Explain how it’s evolved over time. Storytelling is one of the most effective ways to engage your audience, which in this case is your employee.
You’ll also want to include general information on the business’s purpose, objectives, client base, and the overall “about us” information.
Anti-discrimination and anti-harassment laws and policies
Your employee handbook should make your business’ stance on harassment very clear, including potential disciplinary action. The Equal Employment Opportunity Commission (EEOC) website3 is a good resource for information on the legal definition of harassment and employer’s liability.
Standards of conduct
Your business’s standards (or codes) of conduct are primarily a set of principles designed to guide workers to conduct themselves with honesty and integrity as they relate to all actions that represent your business.
Your business’s standards should describe your values, beliefs and ethical standards to which the business and its employees must adhere.
Employee benefits
Often, employee benefits are part of what attracts potential employees to your business. Your benefits package can be the deal-breaker between the candidate’s decision on choosing your business or another one. These are the benefits that are outside of salaries, including medical insurance, PTO, profit sharing and retirement benefits. Your employee handbook should showcase any of the special perks and benefits your business offers.
Confidentiality / Non-Disclosure Agreement / Conflict of Interest
The handbook should also address your business’s approach in these three areas: confidentiality, non-disclosure agreement and conflict of interest.
- Confidentiality: Instill and reinforce that confidentiality of fellow employees and business information is not to be discussed or shared with anyone other than the stakeholders in the conversation, meeting or overall business objectives.
- Non-disclosure agreement (NDA): This is a legally binding contract by which one or more parties agree not to disclose confidential information shared during and as part of business operations. If your company uses NDAs with your employees, this section can serve as a reminder of their obligations under that contract.
- Conflict of interest: This type of conflict arises when a situation that benefits an employee adversely affects your business.
After reading the employee handbook, your employees should have a clear understanding of what those three items mean, and how each one relates to their role in the company.
Employee and employer responsibility for safety
Safety is the business and responsibility of every employer. In this section, you should address the mechanisms your business has in place to keep all employees safe. Include information on safety education courses and training, as well as key protocols they should be following to prevent risk. It should also cover emergency protocols.
How to create an employee handbook
Every business’s employee handbook looks and sounds different depending on their policies and procedures and the business’ personality. It can be very formal in tone, or more conversational and casual. The way the handbook is written should align with the overall tone your company uses in all of its communications.
Gather members of your leadership team, human resources, and perhaps even a few of your newer employees (for fresh and objective perspectives) and build a “handbook team.” This team will bring perspective from all positions and experience to the discussion. Hold meetings at a conducive and productive cadence and open the floor for opinions to be heard and considered.
1. Develop company culture and values
It is essential to define your culture and values before writing about it in your handbook. Make sure leadership is aligned on the set of behavioral and procedural norms, ethics, code of conduct and management style you’re asking employees to follow. Use genuine and sincere language and tone to convey your businesses’ personality.
2. Form your Policies
As previously mentioned, there are several policies and procedures that your business should have in place — some which are legally required, and some which are crucial for fostering the culture you desire. Discuss the following with your leadership team to formulate a standard of rules as it relates to any or all of the below policies4:
- Equal opportunity
- Workplace health and safety
- Employee code of conduct
- Attendance, vacation and time-off
- Employee disciplinary actions
- Employee complaints
- Ethics
- Work schedules
- Compensation and benefits
3. Research employment laws
Each state is subject to different employment laws. Online sources such as the U.S. Department of Labor’s Summary of the Major Laws of the Department of Labor5 can help you get started, but you’ll want to work with your legal counsel to ensure you’re addressing the relevant U.S. federal and state labor and employment laws.
4. Create an outline
Once your handbook team is in place, create an outline to keep everyone accountable. Decide which chapters and topics are essential to address in the handbook and assign those as top priorities. Then consider the “good-to-know” topics and assign these points as secondary priorities.
Once you’ve made it through the top priority information, look at the second priority topics and ask yourself if it’s truly necessary to include or if it can be communicated elsewhere more effectively. Outline the key points to include within each topic.
5. Find examples of employee handbooks
Finding examples of employee handbooks other businesses use is a great way to get some inspiration for the look and feel of your handbook. Try asking friends and peers in your small business network if they are willing and permitted to share their company’s handbook. You can also search for examples online. Read them and take note of what is done well that you can emulate, or what you think could be done differently to better suit your purposes.
6. Producing a written handbook
Your company’s employee handbook should be owned by your human resources department. They may choose to enlist a member of the internal communications department, or even an external agency, to write and design it, but the human resources team is responsible for deciding what needs to be included and ensuring it stays up to date. This is because they are the individuals who are most informed about labor laws and personnel issues that affect the company.
Ideally, your employee handbook should be easily accessible at any time for each employee. Examine your company’s available communications channels to determine if the handbook should be distributed as a printed document, a digital one, or both. A company intranet is a great place to store a handbook because all employees have access to it.
7. Have it reviewed by a lawyer
You should review and revisit your employee handbook regularly to ensure the information is still factual and timely, but you’ll also want a lawyer to review it regularly. Employment law is constantly changing, and handbooks must reflect current law.