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Employee handbooks may seem like something used only by large companies. However, last year Azure found that there’s a strong correlation between having an updated handbook and experiencing growth. What small business doesn’t want that? If you don’t have an employee handbook, even if your staff is small, you probably should (see the reasons that follow). If you already have one, be sure it’s up to date. Here are the why’s and the how’s.
Why you need an employee handbook
There are 5 compelling reasons that every business with one or more employees should have an employee handbook and keep it up to date:
Onboarding. The basics of company policy can be easily communicated through a handbook to help new employees blend into company culture.
Legal protections and risk mitigation. The handbook benefits both employees and the company. It can explain policies regarding discrimination, safety, harassment, and retaliation so that employees know they’re protected. It should also inform them about confidentiality regarding the company’s proprietary information (e.g., customer and price lists). By signing a statement that the handbook has been read, the employer is protected should future issues arise.
Values and policies. The handbook should include a statement about the company’s values and goals (i.e., what employees should aspire to). It should also discuss conduct in the workplace (e.g., meal and rest breaks; whether approval is required for overtime for workers subject to overtime pay rules; when to submits requests for vacation time; a dress code if there is one).
Reference guide for company policies. Information about benefits, how to report on-the-job accidents, harassment, and procedures for other matters can be outlined in the handbook.
Employee benefits and rights. This may help employees better understand their benefits, rights, and responsibilities. Details about health coverage, retirement plan participation, reimbursements for business expenses, paid or unpaid leave, and other benefits can be laid out for easy reference.
How to create an employee handbook
Employee handbooks are documents communicating essential information. Today, they are created and maintained electronically for easy updating (explained later). If you don’t yet have an employee handbook, SCORE explains how to create one.
There are a number of templates you can use to create your company’s employee handbook:
When drafting the handbook, refer to the Department of Labor’s Employment Law Guide. This guide addresses wage and hours worked; safety and health standards; health benefits, retirement standards, and workers’ compensation; and other workplace standards. It also has sections applicable to work authorization for non-U.S. citizens and for federal contractors.
What to update in an employee handbook
Federal and state employment laws are continually changing, and your handbook should reflect current rules. Examples of new rules that should be reflected in your handbook:
Policy on nondiscrimination on the basis of sexual orientation or gender identification
Policy on a dress code (if there is one)
Changes in retirement plans or other employee benefits
Changes in technology triggering changes in company policy (e.g., use of company-provided smartphones; social media postings; use of AI, etc.)
Final thought
Start the year off right by having a comprehensive and up-to-date employee handbook. It’s probably a good idea to have your handbook reviewed by an employment law attorney to ensure that you’ve included everything you should but nothing you shouldn’t. As is usually true, the cost of an attorney’s fee is less than the cost of legal problems that could arise without having the benefit of professional advice.
For more information concerning employment law, check here.
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