Everything You Need to Build Your Employee Handbook

The employee handbook is the holy grail of workplaces, and every employer should have one, regardless of size. However, many small businesses — especially those with fewer than 10 employees — do not have an employee handbook. And many of those that do have a handbook fail to update it. According to Employee Benefit News, “It is estimated that only about one in four small businesses have an updated handbook.” 

Not having an employee handbook is one of the biggest mistakes small employers can make.

Why your small business needs an employee handbook

The employee handbook is a written document that communicates your company’s mission, values, policies, and procedures to new hires and existing employees.

The employee handbook is a written document that communicates your company’s mission, values, policies, and procedures to new hires and existing employees. It provides insight into your company culture, your legal obligations as an employer, and your employees’ rights and responsibilities.

In addition, the employee handbook:

• Lets you formalize your company policies and procedures
• Serves as a valuable onboarding tool for new hires
• Helps keep management and employees on the same page
• Reduces the risk of employment-related lawsuits by outlining the parameters of employment relationships and other factors influencing such litigations
• Shows that you informed your employees about their rights and responsibilities in the workplace

What goes in an employee handbook?

The actual inclusions depend on the rules and laws that apply to your small business. That said, below are topics commonly addressed in employee handbooks.

Welcome letter, and introduction to your company

A warm welcome letter can put new hires at ease and help them feel like part of the team. Along with the welcome letter, provide a brief statement about your small business, including its history, mission, and values.

Equal Employment Opportunity

Explain your commitment to providing an equal employment opportunity workplace. The  statement should align with applicable requirements under federal, state, and local EEO laws.

Company policies and procedures

This section tends to be the most comprehensive of the handbook, and may cover:

• Hiring policies, including background checks and drug testing
• Attendance policy
• Full-time versus part-time employment
• Break, meal, and rest periods
• Timekeeping protocols
• Payroll policies, including pay periods and pay dates
• Overtime pay
• Leaves of absence
• Employee benefits (mandatory and voluntary)
• Performance reviews
• Diversity and inclusion policy
• Confidentiality policy
• Anti-discrimination and anti-harassment policies
• Workplace violence policy
• Health and safety policies and procedures
• Intellectual property ownership
• Privacy rules
• Use of company equipment and tools
• Cybersecurity
• Disciplinary actions
• Terminations

Code of conduct

In this section, state your expectations for how employees should conduct themselves in the workplace. These policies may include:

• Dress code
• Alcohol and drug use policy
• Ethics policy
• Conflict resolution
• Social media use
• Conflict of interest
• Workplace visitors
• Accepting gifts from customers
• Use of company email

Acknowledgement of receipt

Include a statement to be signed by employees, acknowledging that they received, read, and understand the employee handbook. This should be done for both new hires who are receiving the handbook for the first time, and existing employees who are receiving updated copies of the handbook. Make sure new hires and employees know whom to contact if they need clarification on the handbook’s content.

For information on what to do if an employee refuses to sign the acknowledgement of receipt, see “The Case for an Employee Handbook Acknowledgement Form.”

Include a statement to be signed by employees, acknowledging that they received, read, and understand the employee handbook.

Best practices for developing your employee handbook

Make it engaging and easy to read

In a 2020 survey by XpertHR, 66% of HR professionals described “getting employees to read their organization’s handbook” as either “somewhat” or “very” challenging.” 

One reason employees don’t read their handbook is that they find it too tedious, long-winded, or jargon-filled.

To maintain employees’ interest, ensure your handbook:

• Sticks to essential information and avoids pointless details
• Is written concisely, in plain language that the average employee can easily understand
• Is well-organized and flows cohesively
• Portrays a creative design that matches your brand’s voice. For greater impact, you can include pictures of your employees and workplace.

Make it digital

With employees demanding digitization in the workplace and employers increasingly embracing automation, it’s crucial that you make the handbook available in digital formats. This will allow employees to quickly and electronically access the handbook plus refer to it as needed. Also, digital employee handbooks are much easier and cheaper to distribute than paper versions.

Use an Employee Handbook Builder

It can take loads of time to develop an employee handbook from scratch — and for many small businesses time is in short supply. Fortunately, there are online employee handbook builders that can make the process much simpler and even more accurate.

For example, the Wokest Employee Handbook Builder enables employers to easily create a customized digital handbook that fits their unique business needs and culture.

Review your employee handbook with legal counsel

According to the 2020 XpertHR survey, “Organizations’ HR departments generally create their employee handbooks, usually with review by a lawyer.” 

If your small business does not have an HR team, confer with legal counsel before developing your employee handbook on your own.

Keep the handbook up to date

As stated earlier, many small businesses do not update their employee handbook. Generally, the result is an outdated document that does not reflect the company’s current policies and procedures or legal obligations. An out-of-date employee handbook may convey incorrect information to employees and weaken your position in employment-related lawsuits.

Employment laws are always changing, so it’s critical that you update your handbook to reflect new legal developments affecting your small business.

Employment laws are always changing, so it’s critical that you update your handbook to reflect new legal developments affecting your small business. The same goes for non-mandatory changes — such as those impacting voluntary benefits, code of conduct, and timekeeping procedures enacted at the company level.

During national emergencies, such as the COVID-19 pandemic changes in employment laws are usually a given. During such times, be sure to incorporate applicable changes into your handbook.

In general, employee handbooks should be reviewed at least annually. However, the frequency of updates ultimately depends on how often the rules and laws that impact your business change.

Resources for developing your employee handbook

Much of the information in your employee handbook will be contingent on the federal, state, and local employment laws that are relevant to your small business. Here are some compliance resources to help you narrow down applicable regulations:

• U.S. Equal Employment Opportunity Commission: Small Business Requirements 
• Employer.gov: U.S. Department of Labor Resources for Small Businesses
• Employee Benefits Security Administration: Laws, Statutes, and Executive Orders
• State Labor Offices: For State (and Local) Employment Laws

Also, don’t miss out on the Zenefits Employee Guidebook, which offers customizable templates to help you build a compelling employee handbook.