Businesses are constantly adapting to the changing needs and expectations of employees, as well as ever-changing rules and regulations. What was acceptable just a few years ago, may now be considered inappropriate; and processes that were once “good enough” may now be a strain on your team’s time and resources.
One valuable way to communicate your company’s standards and protocols, and ensure compliance across the business, is through an employee handbook.
Why Even Small Businesses Benefit
Employee handbooks play a pivotal role in setting the tone, expectations and legal framework for employer-to-employee, and even employee-to-employee relationships. And while an employee handbook is not a legal requirement, HR experts believe a well-crafted handbook can minimize employers’ risk of litigation.
It might seem like an employee handbook would only be necessary for companies with hundreds of employees and hundreds of millions of dollars in revenues. In reality, no company is too small for a handbook. By having a handbook early on, you can ensure consistency and compliance with changing employment laws and workplace norms from the start. As your business grows, the handbook can evolve with you.
“If you have employees, you need an employee handbook,” says Joey Price, president and CEO of Jumpstart HR and host of the While We Were Working podcast.
Setting Expectations and Outlining Rights
The primary purpose of an employee handbook is to establish clear expectations. As new employees are onboarded, a handbook helps them understand the company they are joining — and remains a resource they can refer to over the course of their tenure.
“The employee handbook is a way of standardizing your policies to ensure fair treatment for all employees,” explained Dana Burch, an employment attorney with Liebert Cassidy Whitmore in San Francisco.
A handbook should encompass a wide range of topics, including harassment policies, social media usage and even how electronic devices like smartphones should be used and handled.
A well-crafted employee handbook also can reduce the risk of lawsuits, Burch said. When employees understand what is expected of them, it reduces the likelihood of misunderstandings that could lead to legal action.
How to Build Your Employee Handbook
To make an employee handbook valuable for your organization, it has to address the issues that your employees might encounter. “They really can be as granular as the employer wants them to be,” noted Jarryd Rutter, Senior Advisor for HR Services at Paychex.
An employee handbook template can be a good starting point. But templates may not be specific enough for your workplace. And while employers can tailor their handbooks to suit their specific needs, there’s a fine line between being overly detailed and overly vague. It’s essential to strike a balance so that your policies are clear without getting weighed down with too many details, according to Rutter.
That said, some policies may require explicit details. For instance, harassment policies tend to complex, so those sections might be more comprehensive. PTO policies, on the other hand, are more straightforward and require little elaboration.
Essential Elements: What Your Handbook Should Cover
Useful handbooks should contain a few crucial components:
Table of contents: This will keep your content organized and easy-to-find.
Mission and vision: Your employers should understand your company’s core values and goals. By including this context, you can ensure that employees understand the bigger picture of what they’re working towards and, most importantly, how they should act as they represent the business.
Operational details: What are your company’s business hours, workdays and overtime rules? For multi-state businesses, consider having an overarching policy that complies with the strictest state laws.
Pay and compensation: Address when employees can expect to be paid and how payment will be processed. Explain how and where employees should record their hours.
Benefits: Include information on paid time off, paid sick leave, insurance options and your retirement plan options.
Standards of conduct: Define behavioral expectations and conduct standards. Provide clear guidelines on preventing and addressing harassment and workplace violence. Clearly define the actions that will result in a leave of absence or termination.
Safety and OSHA requirements: Offer information related to safety and Occupational Safety and Health (OSHA) requirements for your workplace. Consider creating a separate safety manual for more in-depth safety guidelines.
Make is searchable: An electronic handbook allows you to make it searchable so employees can find the exact information they’re looking for when they need it.
Expect Regular Updates
Employee handbooks are never a one-and-done proposition. Employment laws change constantly, and employees must be made aware of the changes.
“If your handbook hasn’t been updated in one year, it’s probably obsolete,” advised Burch.
She recommended that the business owner, manager and/or head of HR and operations review the handbook at least every six months for possible changes. But sometimes, a company’s own situation necessitates an update.
Burch shared an example to highlight the vital role updating employee handbooks: One of her clients had an employee with a disability that could not be accommodated in the workplace, and the client had to terminate the employee. But the company didn’t have a specific policy on separation due to incapacity in their existing handbook. Consulting legal counsel, they implemented a new policy and added it to their handbook at the next update. Now, the company has a standardized procedure for handling similar situations in the future, reducing legal risks and ensuring fairness in their workplace practices.
Legal Review and Notification
Although an employee handbook isn’t a legal requirement, it does carry legal weight. For instance, having well-documented policies around harassment and discrimination can protect you if a former employer were to sue for illegal termination.
“Whenever there’s termination for misconduct, one of the first things an employer will be told is, ‘We want to see your handbook. We want to see your policies, and we want to see proof that the employee was provided that handbook,” Rutter explained.
For that reason, it’s best to have an employment expert review your handbook and ensure that your policies are written in way that doesn’t expose you to litigation. When updates happen, notify employees so they are informed of these changes and how they impact their roles. Ask for acknowledgement to ensure they have not only received the updated handbook but are clear on the changes. .