What is an Employee Handbook?

An employee handbook is a must-have document that outlines the main policies, procedures, and expectations of the company. Employee handbooks are for both employees and employers to provide clarity and consistency in the workplace and to reiterate company values. Defining roles, responsibilities, and company culture an employee handbook is key to a positive work environment. Here, we’ll cover what an employee handbook is, why every company needs one, and how to create one for your business.

What is an Employee Handbook?

An employee handbook is a guide that outlines the policies, procedures, and expectations for employees within the company. It’s a reference manual for employees to understand their rights, responsibilities, and the company’s mission and values. The handbook may include information on employment policies, code of conduct, compensation and benefits, leave policies, health and safety guidelines, and more. Note the employee handbook is different from an employment agreement and is not a legally binding employment contract.

The main purpose of an employee handbook is to ensure all employees are aware of the company’s expectations and to provide a framework for managing workplace issues. It’s a tool for consistent organizational communication to prevent misunderstandings and conflicts by outlining employee expectations.

Why Every Company Needs an Employee Handbook

Having a good employee handbook is essential for any business. Here’s why:

1. Sets clear expectations: A well-written handbook sets out clear expectations for employees regarding behavior, performance, and compliance with company policies. This maintains a standard across the organization. It also informs employees of their rights in the workplace.
2. Protects the company legally: An employee handbook can protect your company from legal disputes by outlining policies on employment, discrimination, harassment, and termination. It’s evidence that employees were informed of company policies and expectations.
3. Ensures consistent communication: With an employee handbook, all employees, including new employees, receive the same information, which is key to consistent policy enforcement and communication.

Employee Handbook Components

When creating an employee handbook, you need to include several key components. A good employee handbook is structured well, starting with a good outline and specific components that fit the company culture.

1. Company Mission, Values and Culture

Including the company’s mission and values in the employee handbook is important as it sets the tone for the workplace culture. It helps employees understand the bigger picture of their work and aligns them with the company’s objectives.

2. Employment Policies

Employment policies outline the terms and conditions of employment. This section should cover important topics such as working hours, attendance, job classifications, and termination procedures. Clear employment policies prevent confusion and ensure all employees understand the rules of their employment.

3. Code of Conduct

A code of conduct outlines employee behavior. This includes guidelines on professional conduct, workplace ethics, dress code, and the consequences of breaching these standards. A well-written code of conduct maintains a professional and respectful workplace.

4. Compensation and Benefits

This section should include information on employee compensation, salary, bonuses, and any other forms of compensation. It should also cover employee benefits such as health insurance, retirement plans and any other perks of the company.

5. Leave Policies

Leave policies are a crucial part of any employee handbook. This section should include details on annual leave, sick leave, parental leave, and other types of leave available to employees. Clear leave policies manage expectations and ensure employees know their entitlements.

6. Health and Safety Guidelines

Health and safety guidelines are important for a safe working environment. This section should outline the company’s policies on workplace safety, emergency procedures and any other health-related information employees need to know.

7. Disciplinary Procedures

Disciplinary procedures outline what the company will do in the event of employee misconduct. This includes the process for investigating incidents, the consequences, and the employees' rights during the process. Clear disciplinary procedures maintain order and fairness in the workplace.

8. IT and Social Media Policies

With technology playing a big part in our lives, it’s important to include IT and social media policies in your employee handbook. This section should cover the acceptable use of company IT resources, social media usage, and handling of confidential information online.

9. Non-Disclosure Agreements (NDAs) and Confidentiality

Confidentiality is key to protecting company information. This section should outline the importance of non-disclosure agreements (NDAs) and the expectations of keeping confidential company data, trade secrets, and other sensitive information.

10. Acknowledgment Form

An acknowledgment form is part of the employee handbook. It requires employees to sign and confirm they have read and understood the handbook. This form proves that employees have been advised of the company’s policies and procedures. It should be included in the employee’s personnel file along with other new hire forms so all relevant documentation is kept for compliance and reference.

6 Steps to Creating an Employee Handbook

Creating an employee handbook takes planning and thought. Here are the steps to follow to create your own employee handbook:

Step 1: What to Include

Start by gathering information from various parts of the company. This includes HR policies, legal requirements and management input. Knowing what to include is the first step to creating a complete document.

Step 2: Use a Template or Start from Scratch

You can use an employee handbook template or start from scratch. Templates saves time and provides a good foundation but creating a custom handbook allows you to tailor the content to your company’s needs.

Step 3: Writing the Handbook

When writing the handbook, make sure the language is simple and easy to understand. Avoid legalese and write for all employees to understand. The aim is to communicate policies and expectations.

Step 4: Review and Edit

Review the handbook thoroughly and get feedback from legal and HR professionals. This ensures the handbook is compliant and covers all aspects of employment.

Step 5: Send to Employees

Once the handbook is complete send it to all employees. Make sure they have access to the handbook in print or digital form and encourage them to read it.

Step 6: Updates

An employee handbook is not a static document. It should be updated regularly to reflect changes in laws, company policies, and industry practices. Quarterly reviews and updates keep the handbook current and relevant.

Legal and Employment Laws for an Employee Handbook

When creating an employee handbook, you must consider the legal aspects. This includes compliance with labor laws such as the Fair Labor Standards Act (FLSA) and not creating an implied contract. Consulting with a legal professional during the process is highly recommended to avoid legal traps.

Mistakes to Avoid When Writing an Employee Handbook

Legalese

While you need to cover the legal aspects, too much legalese can make the handbook hard to understand. Keep the language simple and clear so all employees can read it.

Not Updating Regularly

An outdated handbook can cause confusion and legal issues. Review and update the handbook regularly to keep it current with laws and company policies.

Too Vague or Too Detailed

Finding the right balance between too vague and too detailed is key. You want to provide enough information to be clear but too detailed policies can be overwhelming and hard to enforce consistently.

Not Involving Key People

Creating an employee handbook should be a team effort. Involve HR, legal and management in the process to ensure all perspectives are considered and the handbook is complete and effective.

Employee Handbook Related FAQs

How often should an employee handbook be updated?

It’s recommended to review and update your employee handbook at least once a year, or whenever there are significant changes in employment laws or company policies. Reviewing employee handbook examples can provide valuable insights into current best practices.

How do I handle conflicts between the employee handbook and employment contracts?

In case of a conflict between the handbook employee and employment contracts, the terms of the contract typically take precedence. It’s important to ensure that both documents are aligned to avoid conflicts.

Can an employee handbook be used as a legal defense?

Yes, an employee handbook can be used as a legal defense if it clearly outlines policies and procedures that the company has consistently enforced. However, it should be regularly updated and legally compliant to serve as an effective defense.

Employee handbooks are essential tools for welcoming new employees. New employees employee handbooks help acclimate them to the company culture, address common inquiries, and convey the company's mission.