A Primer on Employee Handbooks


Does my small business need to have an employee handbook?

Regardless of the size of your business, it is crucial to clearly define your expectations and policies to employees. To achieve this objective, it is essential to have formal rules established in an employee handbook. With a written handbook in place, you can clarify the relationship with your employees so that there is a mutual understanding what you can expect from each other. Moreover, if a dispute arises with an employee or a claim is made with a government agency, a well-designed handbook can also protect you legally.

Let’s take a look at what should be included in an employee handbook.

1. Compensation

First, an employee handbook should specify how employees are paid, whether based on an annual salary, and hourly wage, or commissions. Moreover, employees should be informed when they will be paid – on a weekly or biweekly basis, or in the case of many sales workers, monthly. Your compensation policy should also state how hours worked are recorded (today many employees are required to clock in electronically), how taxes are computed and deducted, and under what circumstances overtime will be paid. It is important to note that employee compensation policies must also adhere to state and federal wage and hour laws.

2. Benefits

It is equally important to provide your employees with information about what benefits are offered, including employer-sponsored health insurance, 401(k) retirement plans, bonuses, profit-sharing plans, stock options, and the like. Your handbook should also specify how employees can qualify for these benefits.

3. Work Schedules

Information about daily work schedules, such as the company’s hours of operation, attendance, lateness, hours required each day, rest and lunch breaks, whether employees are entitled to paid personal, sick, and vacation days, and how that time accrues, whether employees can work flexible schedules or are allowed to telecommute, should also be summarized in your handbook.

4. Employee Conduct and Disciplinary Matters

It is crucial that your guidelines inform your employees on how they are expected to conduct themselves at work. In particular, your handbook should address issues such as employment discrimination and sexual harassment in the workplace. You must clearly state that there is zero tolerance for discrimination and harassment and that such behavior is grounds for termination. As for other workplace violations, such as excessive tardiness, absenteeism, and misuse of company phones, email, and other company equipment, your handbook should explain what disciplinary actions will be taken.

5. Safety Concerns

Lastly, a comprehensive employee handbook will also discuss potential safety concerns as they relate to work conditions, employee health issues that may arise, employee disputes, workplace violence, and even inclement weather.

The Bottom Line

Ultimately, how extensive your handbook should be depends on a number of factors, such as the size and structure of your business as well as the industry in which you operate. By engaging the services of an experienced business and employment law attorney, you can design and implement an employee handbook that can create a positive culture and protect your business.