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Employee Handbook


What Is an Employee Handbook?

An employee handbook is a comprehensive guide for employees, informing them about a company’s policies, procedures, and practices. Also called a staff manual or employee field guide, employee handbooks are typically distributed to new hires on their first day to help them understand how to start their job. However, employee handbooks can also serve as a great reference tool for existing employees, as they can be adapted and modified as a company progresses.

Employee handbooks cover a wide range of policies and practices, such as behavioral expectations, how to use company equipment, promotion policies, and Equal Employment Opportunity Commission (EEOC), Americans With Disabilities Act (ADA), and Fair Labor Standards Act (FLSA) policies. Overall, employee handbooks are an all-encompassing written document that details the many moving parts within a company.

What Should Be Included in an Employee Handbook?

An employee handbook is an extensive document that details a wide range of company policies, practices, and procedures. Many components can make up an employee handbook, such as:

  • Welcome letter from the CEO or president
  • Statement of the company’s mission, vision, values, and purpose
  • Applicable non-compete and non-disclosure agreements
  • Attendance requirements/absenteeism policy
  • Non-exempt and exempt employment status definitions
  • Use of company equipment and property
  • Employment compensation and benefits description
  • Dress code
  • Legal policies
  • Statement on company culture
  • Human Resources information
  • EEOC and ADA policies
  • Code of ethics
  • Social media policies
  • Overtime policies
  • Safety policies
  • Additional company policies and procedures

Overall, employee handbooks contain a comprehensive list of policies, procedures, and practices. While these can vary from company to company, they serve as a general outline for components that should be included in an employee handbook.

Why Should a Company Create an Employee Handbook?

Employee handbooks serve several purposes for both employees and employers. One of the main benefits for both parties is that employee handbooks can help reduce conflict and offer guidance to solve employee or cultural issues within the company. Below are more benefits that make great reasons why a company should create an employee handbook.

Benefits to Employees

First and foremost, an employee handbook is designed to help employees understand a company’s culture, policies, procedures, and practices to ensure they’re getting the job done. However, this isn’t the only reason why employees benefit from an employee handbook. Some additional benefits include:

  • Outlines employer expectations
  • Provides information about the company
  • Helps prepare new employees for their job
  • Serves as a resource after employee onboarding
  • Describes how an employer will respond to complaints or conflict
  • Outlines benefits and compensation packages, such as PTO and disability leave

Benefits to Employers

While creating an employee handbook might seem overwhelming at first, doing so can help mitigate any issues in the long run. The main benefit of an employee handbook for employers is that it keeps all company procedures and policies in one place, making them easy to enforce and refer back to, especially if an employee breaks one of these procedures or policies. Employer handbooks also:

  • Help mitigate conflicts between employees
  • Allow employees to get a better understanding of the company
  • Communicate expectations to employees
  • Comply with state and federal laws
  • Defend against employee claims
  • Provide protection against lawsuits, such as harassment claims, discrimination claims, and wrongful termination claims

Legal Requirements of Employee Handbooks

Most employees expect to read and sign an employee handbook during their onboarding process. However, the Federal Department of Labor doesn’t legally require employers to create an employee handbook. Instead, employers must inform employees about their rights, which can take many forms, such as a posted workplace sign or other document. However, an employee handbook can serve as a great way to keep an employee’s legal rights along with any other additional company policies in one place. Some federal labor laws to reference in an employee handbook include:

  • Family and Medical Leave Act (FMLA) laws
  • Wage and Hour laws
  • Unsafe Workplace Complaints and Conditions laws
  • Workers’ Safety Rights/Occupational Safety and Health Administration (OSHA) laws
  • Workers’ Compensation laws
  • Wrongful Discharge/Termination of Employment laws
  • Drug-Free Workplace policies

In addition to federal labor laws, state labor laws might need to be included, which can become complicated if a company employs workers in multiple states. In this case, a best practice is to provide a location-specific section in an employee handbook that details any applicable state laws.

In most cases, employers will require their staff to read the employee handbook and sign a statement agreeing that they read the document and will abide by the contents within. Employee handbooks also have a disclaimer, which lets employees know the employee handbook is a set of guidelines and policies, not a formal contract, which means the employer can change any policies and procedures at any time.

Updating an Employee Handbook

Employers should review their employee handbook at least once a year to make any necessary changes, revisions, and updates. Doing so can help ensure the employee handbook is up to date with any state and federal laws, as well as new company policies and procedures. Having an outdated employee handbook can cause a wide range of problems, such as confusion among employees, policies that aren’t legally compliant, and difficulty onboarding new hires.

Employee handbook updates should be made whenever significant changes are made, such as when a new product or service is introduced, there’s a location change, or new job roles are added within the company. Keeping an employee handbook current is not only professional but can help employees answer certain questions without having to go to HR or their manager and can prevent false information from spreading around the company.

How to Create an Employee Handbook

Creating an employee handbook is a great way to keep employees updated on any company policies and procedures. Below are the steps on how to create an employee handbook:

  1. Create an outline: Start by creating an outline that details not only the contents that are going to be inside the employee handbook, but also the design, text, and opening pages.
  2. Fill in policies and procedures: Once your outline is complete, write your policies and procedures and organize them into appropriate chapters or sections.
  3. Revise with stakeholders: After completion, share your employee handbook with key stakeholders, such as Human Resources, lawyers, and consultants, to ensure you’re in compliance with state and federal laws.
  4. Hand out to staff: Once the final review is complete, hand out your employee handbook to staff, which can be via email, hardcopy, or both.
  5. Make updates: Employee handbooks should be a living document, so make any necessary updates as time goes on and incorporate feedback from employees, lawyers, and HR throughout the year.
If you are wanting to explore more on this topic, check out our blog post "How to Get Employees to Clock In and Out" which explains the importance of an employee handbook.


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