An employee handbook is an essential document for any company, whether it has a thousand employees or just a handful. It allows you to define your company’s culture, set expectations for your employees, and inform them of their rights under the law.
A well-written employee handbook provides you with legal protection by defining procedures for matters like hiring, salaries and benefits, and discipline and termination. Following the procedures set forth in your employee handbook will protect you if you get into a dispute with a current or former employee.
What should you put in your employee handbook? That depends on factors like the size of your company, the type of business you are in, and the jurisdiction where you are located. The following are some general suggestions for what a good employee handbook should include.
Introduction
Your handbook should open by welcoming new employees to the company. You might include a brief introduction from the CEO, followed by an explanation of the handbook’s purpose—to help employees understand the company’s policies and procedures.
Disclaimers
Perhaps the most important part of your handbook is the disclaimer section. This section explains, first, what the employee handbook is not. It is not a contract between the company and the employee. It is not a guarantee of employment.
This section should also notify the employee that the handbook may be subject to change. The company can update the handbook at any time, as long as it notifies the employee and gives them an updated copy. The employee should sign a form stating that they have received a copy of the handbook. You should keep this form in the employee’s file.
Company Profile and Mission Statement
Your employee handbook lets you introduce new employees to your company and its culture. An overview of the company, along with a bit about its history, can help new hires understand the organization they have just joined.
Who founded the company, and when? Why did they found it? How has the company grown over the years? What is the company’s mission statement? How can new employees help the company achieve its mission?
Hiring and Separation
Once you have provided an overview of your company and its culture, you can begin introducing new employee to their roles within the company. In this section, you can outline what to expect during the first days, weeks, and months on the job. You might include a description of the employee orientation process, or state whether a probationary period applies before new employees become eligible for benefits.
If your company is an “at-will employer,” this might be a good place to include information about that. “At-will employment” means that an employer can fire an employee for any reason, or no reason at all, as long as it does not violate the law. (In Montana, which generally doesn't allow at-will employment, employers can only fire someone for “just cause,” such as misconduct.)
Your handbook should describe procedures for separation, including both termination by the employer and resignation by the employee. You might, for example, want employees to give a certain amount of advance notice before quitting. You should also explain procedures for the return of company property after an employee quits or is fired.
Payroll, Wages, and Overtime
Your handbook should explain how employees can account for their time, such as by submitting timesheets or punching a clock, and when they can expect to get paid. It should state when overtime applies, whether employees need approval to work overtime hours, and how to obtain that approval. If you have policies regarding raises, it should include those too.
Fringe Benefits
If you provide benefits for your employees, such as health insurance or a retirement plan, your handbook should describe those benefits and explain how employees become eligible. It should also address the availability of benefits like COBRA coverage after an employee leaves the company.
Promotions and Performance Reviews
Defining expectations for employees is an important function of an employee handbook. If you conduct performance reviews, your handbook should describe that process. If you have a policy regarding promotion of employees, the handbook should discuss that as well.
Medical and Parental Leave
Some states and cities require employers to provide paid or unpaid leave for illness, childbirth, or other reasons. The federal Family and Medical Leave Act requires some employers to provide unpaid leave for personal or family medical issues.
Many employers offer more leave than the law mandates. You should determine which laws apply to your company. Your handbook should explain both your employees’ rights under the law, and your company’s policy on leave.
Conduct and Discipline
This section allows you to define your office culture and environment. It also gives you legal protection should you discipline an employee who does not follow workplace rules. Office codes of conduct often address matters like dress code; smoking, vaping, other substance use at work; use of electronic devices at work; social media usage; and discrimination or harassment between employees.
Disciplinary rules should explain how the company investigates complaints of misconduct. It should identify penalties for violations of the rules, and describe an employee’s rights if they are accused of something.
Discrimination, Harassment, and Retaliation
Federal, state, and local laws prohibit discrimination to varying degrees. At the national level, employers may not discriminate on the basis of race, religion, color, sex, pregnancy, national origin, or disability. Some state and local laws go further than federal law, prohibiting discrimination based on factors like marital status or veteran status. Sexual harassment and harassment based on a factor like race or religion also violate laws against employment discrimination.
Employers may not retaliate against employees who object to or report unlawful activity. This includes “whistleblowers” who report alleged legal violations, as well as employees who report discrimination or harassment.
Your employee handbook should describe employees’ legal rights and your company’s policy on equal employment opportunity. It should inform employees of the process for reporting alleged violations, and outline how the company will investigate claims.
Reasonable Accommodations
The Americans with Disabilities Act requires employers to provide reasonable accommodations for employees with disabilities. Some states and cities also require reasonable accommodations for pregnant employees and employees who have recently given birth.
For example, you might be required to provide a lactation room where employees who are nursing an infant can express breast milk. The website of your state's labor department can provide more information about your accommodation requirements.
Your handbook should describe the process for requesting an accommodation.
Trade Secrets, Non-Disclosure, and Confidentiality
You entrust your employees with confidential and proprietary information. Your handbook should identify your expectations for maintaining the secrecy of that information. If you wish, you can require employees to sign a separate non-disclosure agreement, with penalties for revealing sensitive information without permission.
Remote Work Policy
If you allow employees to work remotely at least some of the time, you should outline your remote working rules in your employee handbook. Doing so helps establish clear expectations for remote employees regarding work hours, communication, availability, and performance standards. It also protects the company by addressing legal and logistical concerns such as data security, equipment usage, and compliance with labor laws.
State and Local Laws
No law requires your business to have an employee handbook, but many jurisdictions require employers to notify their employees of certain legal rights. Some cities, for example, require employers to provide information about local laws prohibiting discrimination, harassment, and retaliation.
A handbook gives employers a single place to include these notices. Before you begin writing your employee handbook, you should investigate what the law in your jurisdiction requires.
You should also stay up to date on local, state, and federal employment laws. If a new law contradicts a policy in your employee handbook, the handbook will have to change if you want to avoid legal trouble.
Contact an Attorney
If you need help drafting your employee handbook, or you'd like an employment law specialist to review changes to an existing handbook, consult an employment attorney.