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Employee Handbooks - The guidebook for company culture and employee behavior.


Every small business that has employees, regardless of how many or how few, should have an employee handbook. Your employees are the most important asset of your business, and the handbook sets out the rules, rights, and responsibilities that apply to employees of the business. Employee benefits such as vacation days, paid leave, health benefits, and insurance details are important topics to include in your handbook. A key purpose of your handbook is to ensure all employees are aware of these rights and benefits. It also puts in writing the company’s culture, goals, and values. It is critical for building a solid employer-employee relationship and creating consistency within your organization.


An employee handbook is not a contract between the employer and the individual who is employed by the company. This is a critical point to emphasize in your handbook. It is a useful tool in resolving workplace disputes and a valuable management tool, particularly for small businesses. It is inexpensive insurance to help decrease the likelihood of future litigation by disgruntled former employees. It provides legal evidence that rules, rights, and business practices were communicated to the employee, in writing, upon employment.

The topics that should be covered in an employee handbook depend on the type of business. They include:


Your Company Profile. Start with the mission of your business, explain what it is your company does, who it serves, and why. Include the history of your business and your business values and beliefs. Share your company vision and your goals for the company and how employees contribute to reaching those goals. The culture of the company, including any informal policies, should be shared.


Onboarding Guidelines. Your handbook should include information about what a new employee can expect as they begin work. It should include details of their position, team structure, and contact information for key personnel. If there is a trial or probation period, that should be included here. Explain the time system employees use and how hours are tracked. List the break and meal locations. Include all day-to-day things an employee needs to know for their workday.


Company Policies. Employees cannot meet your performance expectations if you don’t tell them what they are. Your code of conduct should go here. Make clear what is acceptable behavior during company time. List the daily work hours for employees in the office and any policies about remote work or flexible hours. Give expectations for attendance including policies for tardiness and leaving early. This section may include a dress code to ensure everyone looks professional or at least complies with the company’s standards. Provide the policy for taking time off for vacation or sick leave. List any company-paid holidays provided. Tell employees your policy for the length and frequency of breaks and mealtimes. Make sure your break policy complies with any state-mandated requirements. In Illinois, an employee must be given a meal period of at least 20 minutes if they are scheduled to work 7.5 continuous hours or more. It must be given no later than five hours after beginning work. Your drug-free and alcohol-free workplace policy and smoking policy would be included in this section. Any activities that can get an employee disciplined should be listed in this section.


Social Media Policy. I split this out from the general company policy paragraph because in the social media-driven society we live in today it requires a longer discussion. The first thing to understand is that you cannot control or restrict what an employee posts on their personal social media accounts on their own time outside of work hours.


However, you can limit an employee’s use of social media during company time even on personal devices. If you choose to limit the use of personal devices, the policy should be clear and uniformly enforced.


As you consider the language of your social media policy, keep in mind the value of your employee’s social media network to your business. Positive company culture determines many of the outcomes of a social media policy. Happy employees can be some of your best marketers by sharing their experience at your business and your great products or services.

As part of the policy, emphasize any confidentiality requirements relating to clients or products. Define what is acceptable public information and what is not. Employees should be educated about how to provide disclaimers in any of their politically motivated posts. You cannot limit what they say, but you can ask that they add language in their posts that their views are not necessarily the views of their employer.


Your policy should also include how company-owned social media accounts are managed and used. Assign roles, develop security protocols, create a social media response plan, and ensure its use complies with state and federal laws.


Compensation and Performance Reviews. Include the payroll schedule and payment options. You should also discuss what deductions are taken from your employees’ checks. If workers are required to travel for business, then you’ll need to cover the travel and expenses policy. Include job classification details, promotion process, and job transfer process. Outline the performance review process including the frequency of reviews and standards of performance.


Benefits. All benefits you offer should be listed including retirement plans, health insurance, life insurance, disability insurance, and workers’ compensation insurance.


Safety Guidelines. This section provides the policies in place for emergencies, health, and safety purposes. This includes safety procedures that outline what to do in the event someone is injured on the job. The location of the first aid kit, fire extinguishers, and other key tools is essential. If employees drive company vehicles, then the standard procedures for reporting accidents should be explained.


Legal Requirements. It is important to state that the handbook is not a contract and reinforce their employment-at-will status. If your business has 50 or more employees, include information about the Family Medical Leave Act (FMLA). Include workers’ compensation policy information and what happens if an employee is hurt on the job. You should include a non-discrimination, anti-harassment, and equal opportunity policy. You must discuss how you accommodate people with disabilities in your workplace. Explain that the policies in the handbook are subject to change at any time and they will be notified of any changes. Tell them where you post the state and federally required notices in your business location. The handbook should include a form verifying the employee reads and understands the information contained in the Employee Handbook. It should also include other documents you use that require a signature such as the at-will employment clause, conflict of interest statement, confidentiality agreement, non-compete, non-solicitation, and equal employment opportunity statement. A copy of the signed and dated documents should be given to the employee and a copy kept in their personnel file.


Appropriate Use of Company Equipment. Many businesses rely heavily on computers in their day-to-day operations. It is important to put in writing your policy for the personal use of business computers. If you do not want your employees checking and sending personal emails and using the internet to check social media feeds on your computers, then put that in writing. Your policy on making personal phone calls on business phones or using their cell phone while on company times should be addressed. If you are more flexible in your tolerance for these activities, you should discuss your expectations to give employees an idea of what is permissible. Provide the policy for the personal use of the company car.


Discipline and Termination. You must clearly define the infractions that require disciplinary steps. It should explain each step in the progressive discipline process and how the last step leads to termination of employment. This section should include the information discussed in the post about Performance Improvement Plans.


Employee Problem Resolution Procedures. Include the formal process for employees to report internal complaints or grievances if they believe they need to seek fair treatment.


Your Employee Handbook does not have to include all these sections or use these titles. These are suggestions for some of the information you could include. There is also more information that could be included depending on how detailed you want to make this document. However, there are some sections, such as the ones listed in the Legal Requirements paragraph, you should include.


You should review your employee handbook annually to make sure it complies with state and federal laws. An annual review also provides an opportunity to update your handbook to keep up with societal changes or changes in company policy.


If changes are made to the handbook, employees must sign a new acknowledgment that they have read the handbook. Even if no changes are made to the handbook, it is a good policy to have employees reread and resign the acknowledgment annually.


If you cannot afford to have an attorney draft your Employee Handbook initially, you can find many examples of Employee Handbooks through a quick search of the internet. It is easy to get overwhelmed with the number of samples available. Select one basic template that covers most of the information I suggest here and begin with that. Revise the sample handbook using language that reflects your company style and culture. The rules you have for your employees and how you relay them is another way you set the tone of your leadership of the company.

After you have drafted your Employee Handbook, I would recommend you have an attorney review it. This should be less costly than drafting a complete handbook and will ensure you have the necessary legal language to minimize your liabilities.


We can review your Employee Handbook or help you draft a new one. You can learn more about our flat-rate employment law services here.

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