By Krystal Barghelame
What is an employee handbook?
An employee handbook is an important living document for your employees that outlines your company policies, history, and culture for current and future employees. Although 87% of businesses with 10 to 200 employees have employee handbooks, HR experts agree that it’s best practice to start a handbook as soon as you hire your first employee, because it defines expectations and can protect you legally.
Here are the main policies you’ll want to record in that employee handbook:
- Onboarding and joining the team
One of the top motivations for businesses to create an employee handbook is to train new hires. So, kick things off by laying out the basics that every employee should know before coming through the front door.
The employee onboarding section may include your:
- At-will employment clause
- Equal employment opportunity statement
- Conflict of interest statement
- Confidentiality agreement
- General details, such as directions to the office, team structure, and key contact info
A quick reminder about at-will employment:
If there isn’t an agreement clearly stated in your employee handbook, then this type of employment is assumed in all states.
Here’s an example of a sample at-will clause you can use as a model:
“Keep in mind that [your company] is an at-will employer. This means that either party can end the relationship at any point for any reason, with or without notice.”
- Code of conduct
Even the most free-flowing organization has boundaries. Your code of conduct section should spell out the behavior expectations as a member of your team. If there’s anything that’s frowned upon, this section should cover it. For example, you can explain your:
- Dress code policy
- Anti-discrimination policy
- Anti-harassment policy
- Substance-free workplace policy
- Taking disciplinary action
- Office environment
What’s life like at the office? This section of your employee handbook explains how, when, and where employees are expected to get things done. You’ll want to include topics like:
- Work hours
- Your work-from-home policy
- Lunch and break periods
- How to keep the workplace safe
- Americans with Disabilities Act (ADA) accommodations
- Use of company equipment
- Communication policies
How does your team interact with each other? What about clients, vendors, and other partners? Some of this may seem like common sense, but it can still be helpful to spell it all out in your employee manual.
Set out your expectations for channels like:
- Social media
- On-site and remote work
- Compensation and performance reviews
Not to downplay other critical policies, but the next two sections are ones your employees will likely flip back to frequently.
Here’s a look at the policies you’ll want to cover:
- Payroll schedule pay
- Paycheck deduction
- Job classification details
- Salary and bonuses
- Performance reviews
- Promotions and transfers
- Travel and expense policy
- Benefits
Woohoo! Here’s where you list out the benefits you offer your team and explain how they match up with the values you celebrate. When someone’s finished reading this section, they should feel knowledgeable and well taken care of.
Open with a quick-reference section that outlines details such as which types of workers are eligible, when benefits kick in, and your plan’s policy number. Then, start with the essentials and work your way up to the icing-on-the-cake benefits:
- Health, disability, life and workers’ comp insurance information.
- Retirement plans, like a 401 (k)
- Paid time off (PTO)
- Other leave policies, such as parental leave, sick leave, or jury duty.
- When someone leaves
It happens: Sometimes you just need to part ways. This section of your employee handbook should explain what happens when someone quits or gets terminated.
Explain the offboarding basics, such as:
- When your employee will receive their final paycheck.
- How exit interviews work
- How Consolidated Omnibus Budget Reconciliation Act (COBRA) benefits work if someone is laid or fired.
- Your company story
And last, don’t forget to share who you are and why you’re here! (Okay, this isn’t really a policy, but it’s still important).
From your original vision to how your company came into being, your company’s story is the underlying foundation that inspires people to show up and do amazing things every single day. Bring new employees into the fold by sharing this history with them.
Ask yourself:
- Who is your company and what do you do?
- Why does it matter?
- Why should others care, too?
What do other small businesses have in their employee handbook? Here are the most common employee policies businesses include in their handbooks.
| Policy | 1-9 employees | 10-200 employees |
| Work hours | 31% | 62% |
| Workplace safety | 29% | 69% |
| Company mission and values | 26% | 53% |
| Dress code | 22% | 56% |
| Use of company equipment | 22% | 49% |
| Salary and bonuses | 20% | 53% |
| Lunch and break periods | 19% | 53% |
| Substance abuse | 18% | 49% |
| Email and internet usage | 18% | 50% |
| Disciplinary action | 16% | 61% |
| Social media | 16% | 43% |
| Data privacy | 16% | 46% |
| Travel and expensing | 16% | 41% |
| Performance reviews | 15% | 56% |
| Termination and offboarding | 13% | 41% |
| Bullying | 11% | 36% |
| LGBTQ+ rights | 5% | 23% |
| None of the above | 41% | 4% |
Your employee handbook isn’t just a helpful reference doc; it captures the culture, values, and personality of your company. Give every policy careful consideration and take time to make your employee handbook shine.