What’s one thing that both the smallest of startups and the largest of enterprises need?
An employee handbook. If you think having one is unnecessary for your small company with just a handful of employees, think again. Regardless of your organization’s size, a well-written handbook’s impact shouldn’t be overlooked.
What is an employee handbook?
An employee handbook, sometimes called an employee manual, is a document that communicates a company’s policies, mission, and expectations. An employer will give this document to employees to explain their legal rights and their responsibilities while employed with the organization.
Passing out a handbook can make new hires feel more equipped to handle their daily work while increasing their efficiency during onboarding. In addition to having critical details for new employees, a handbook can include longer documents that provide a reference for company policies throughout an employee’s tenure with an organization.
It’s common for human resource professionals to turn to HR compliance software as they manage all HR-related resources and details in a handbook.
Employee handbook benefits
Taking the time and putting in the effort to create an employee handbook is a must for organizations of all shapes and sizes.
Let’s look at some of the main reasons why your team needs an employee handbook to reference.
- It introduces new employees to the company's values, mission, culture, and goals.
- It details employer and employee expectations.
- It explains key company policies, rules, and regulations in a clear and concise way.
- It provides information regarding benefits that employees may need.
- It ensures the organization always stays compliant with state and federal laws.
- It lets employees know where they can go for help and who to turn to when they have a question or concern.
- It can reduce uncertainty around how to manage staff. Managers and HR professionals can field fewer questions about policies, reimbursement, and core job responsibilities.
What to include in an employee handbook
If you’re creating a company employee handbook for the first time or for a brand new company, you need a place to start. And for that, it’s all about knowing what sections to include and what information goes where.
“An employee handbook is a policy-driven document, making it clear to employees what’s expected, including areas around conduct and performance. A well-written handbook can be a great way to reinforce culture, values, mission, and vision.”
Director of People Operations at G2
Your company’s handbook should start with the basics. Kick things off with an employee handbook table of contents at the beginning and then introduce information and key details. This section should be mostly informative and helps lay the groundwork for basic employee information. Employees will use this section when they have general or high-level questions.
First, provide information about the company’s mission statement and values to ensure alignment right at the start. Share a statement explaining what matters most to the company and highlight the values employees should abide by.
Need some inspiration? The G2 Employee Handbook outlines our PEAK values, which you can read more about on our G2 Culture Page.
This section should also include an equal opportunity employment statement. This is a necessary part of the handbook, not only for legal purposes but because it promotes a culture of meritocracy and respect in your workplace.
Next, outline the recruitment and selection process. This section should share the typical steps of the hiring process and information about background checks, referral programs, and other general guidelines. Also, mention if any of these rules differ between full-time and part-time employees, in addition to temporary, contract, and non-exempt staff. Define what it means to be full-time and part-time employees.
Finally, share some background information on the company and how it came to be. Have some fun with this section!
The company background information can answer questions like:
- What is your company and what do you do?
- Who are the founders and when was it founded?
- Where was the original office?
- Why does it matter?
- Why should others care?
Once the basics are covered, move along to specifics surrounding workplace policies and the conditions employees can expect to work in.
The policies and tips that should be included here are:
- Confidentiality and data protection: Share basic rules regarding the protection of information, how employees can abide by laws with regard to the company, and what’s expected of every employee.
- Attendance: Outline attendance rules, like what an employee should do if they’re unable to make it to work and who they should contact. This policy will likely depend on your organization’s industry.
- Harassment and violence: List all of the current federal, state, and local laws applying to your workforce. This lets employees know your company is committed to eliminating all types of harassment and violence in the workplace. This section should define what counts as harassment and violence, what disciplinary measures will occur if these rules are broken, and how your company directly avoids a hostile work environment.
- Office environment: Detail information like work hours, the work-from-home policy, lunch and break periods, Americans with Disabilities Act (ADA) accommodations, and policies pertaining to company equipment.
- Workplace health and safety: Present guidelines for employees to follow to ensure a healthy and safe workplace. It can also detail how your company complies with occupational health and safety laws, as well as information about how employees are protected in hazardous roles or from emergencies. Companies can also include a mental health policy, details regarding an employee assistance program, and how they aim to mitigate job burnout.
- Payment schedule: Explain your company’s pay periods. It should also outline which payment methods are available. For example, specify if your business pays employees every two weeks, once a month, or on specific days of the month like the 1st and the 15th.
Code of Conduct
A code of conduct spells out how an employer expects employees to conduct themselves at work. Every organization has boundaries, and this code essentially covers any unacceptable behavior.
Rules and regulations within a code of conduct can include:
- Dress code policy: Describe appropriate and inappropriate workplace attire. The dress code policy should be as detailed as possible. For instance, if your office leans towards “business casual”, provide some examples as to what this may include.
- Social media and personal technology use: Get specific regarding the parameters of social network use and personal technology, like smartphones, when working.
- Cyber security: This section can entail various training employees are expected to partake in regarding cyber security protections and how to protect their email accounts and devices from scammers.
- Drugs and alcohol usage policy: Most companies use this section to detail their substance-free workplace and explain whether they test employees for drugs or alcohol use throughout their employment.
- Conflict of interest: Describe what constitutes a conflict of interest, what employees can do when faced with one, and what the consequences are for breaking company rules.
- Rules surrounding accepting gifts from clients or customers: Be specific regarding the rules for accepting monetary or other kinds of gifts from customers.
- Employee relationships and fraternization: Lay down rules about employees becoming friends or dating to avoid gossip or unprofessional situations.
- Employment of relatives: Go into detail here to avoid claims of nepotism and favoritism. Share guidelines about whether or not working relationships are allowed amongst relatives.
- Workplace visitors: Outline the process of bringing visitors to the office because this is a matter of protecting employee and company data and property.
- Conflict resolution policy: Explain the protocol to follow when conflicts occur between employees and what disciplinary actions happen if issues aren’t resolved.
- Communication policy: Convey how employees should interact with one another, as well as with customers, partners, and vendors. It should set expectations for email, instant messaging, and social media.
Compensation and development
An employee handbook's compensation and development portion provides information surrounding employee compensation and employee development. This section is one of the most frequently referenced sections in the handbook.
First, detail the payroll schedule, meaning how often full-time and part-time employees receive their paychecks. Options here are usually a weekly, biweekly, semimonthly, or monthly payment schedule. This section also goes into detail about any payroll tax deductions.
There are 3 main types of payroll deductions:
- Pre-tax deductions and contributions: Money that is taken out of employees’ gross pay before any taxes are withheld from their paycheck. These typically go to some type of retirement fund, health insurance, or commuter benefits.
- Local, state, and federal taxes: Money that is withheld from an employee’s pay on each paycheck.
- Post-tax deductions and contributions: Money that is taken out of your employees’ paychecks after all applicable taxes have been withheld. This includes a Roth 401k, wage garnishments, and union dues.
Next, outline if overtime pay is offered to employees who work over their agreed-upon hourly work week. This section should also provide information regarding promotions, lateral career moves, and transfers. Additionally, this part should be specific about other forms of compensation, like employee bonuses and merit pay.
Then, have a performance management section of the handbook. Employees use this information to understand performance evaluation. Managers look to this information to clarify which duties are expected of them. You can mention the objectives of performance reviews and how you expect managers to lead their teams. This should also include details about performance improvement plans (PIPs) and procedures for failure to meet performance goals should be provided.
Finally, detail your training and development plan for all employees and how your company is committed to helping them improve professionally and personally. Explain everything from training opportunities to tuition reimbursement.
Employee benefits and perks
Another frequently bookmarked area of an employee handbook is the section giving information about all the fun perks and benefits your company offers. After reading this section, an employee should feel well taken care of, appreciated, and entirely in the know.
Start the benefits and perks section by outlining details like eligibility, benefits start date, and your plan’s policy number. Then, get into the essentials.
First things first: the paid time off (PTO) policy. This is the policy your company offers its employees that allows them to take time off from work as needed for specific reasons or occurrences. How much you offer, or when you allow employees to use their PTO, can vary.
Potential types of PTO:
- Vacation time: Go into detail regarding how much vacation time is offered to employees.
- Sick leave or family medical leave: Outline what the law is in your state for how to offer employees sick time. Then, define what are short-term and long-term illnesses.
- Bereavement: Share how many days of bereavement leave employees receive when they have lost a loved one.
- Holidays: List the holidays your business observes, so employees know when to expect this time off.
- Parental leave: Go into detail regarding maternity and paternity leave, in addition to employees who have adopted a child. This can also include benefits like taking time off for school meetings.
- Jury duty and voting: Outline the law regarding leave for civic duties and what documentation employees may need to show their manager regarding these events.
- Military leave: This is a leave of absence policy granted to employees who participate in certain active or inactive duties in the United States military, including the National Guard and Reserve of the Armed Forces.
- Sabbaticals: Share how much time off is given to an employee once they have worked for the company for a specific amount of time, usually five years.
In addition to PTO, there are several other benefits and perks this portion of the handbook should outline and give details to. Some are:
- Employee health: This section should include anything from private health insurance, gym memberships, or wellness programs.
- Workers’ compensation: Share the process employees need to follow if injured while at work and the benefits the company offers.
- Work-from-home policy: If your business allows employees to work remotely, state how employees can ask for remote working perks and the rules they need to follow. This can also include rules for permanently remote team members.
- Employee expenses: Mention if work-related expenses are covered and how employees can claim reimbursement.
- Parking: If the company offers free parking to employees, share exactly where the lot is and if employees have dedicated spaces. If the lot only has limited spaces, explain how spaces work. If the office is in an urban area, this section could share the parking lots closest to the office.
- Company-issued equipment: If your company issues cars, phones, laptops, and headphones, inform employees how these items should be taken care of and how to report if any are lost, stolen, or damaged.
Resignation and termination procedures
It’s not likely an employee will stay at your organization for their entire working career, so the employee handbook should include details about offboarding. This should include:
- Employee resignation: Whether through resignation or the end of a contract
- Retirement: When the employee has decided it’s time for them to transition out of the workforce
- Layoffs or termination: When the company decides they can no longer have an employee within the organization, whether due to personal performance or company financial issues
This section should highlight when an employee will be given their final paycheck, how the exit interview process works, and how Consolidated Omnibus Budget Reconciliation Act (COBRA) benefits work if someone is laid off or fired.
Various legal mandates
Last but not least, an employee handbook needs to touch on employment laws and various legal mandates.
Numerous federal and state laws affect employees. Some of these are:
The laws and regulations vary by state, but your handbook must mention the ones that apply to your organization.
How to write an employee handbook
Now that you understand what needs to be included in a basic employee handbook, let’s go into how to get started writing one.
First, review your current company policies and make any revisions that seem necessary. The last thing you want to do is spend the time and energy putting these policies into the handbook only to realize a few months later it needs to be updated. If any policy or rule requires some revising, now is the time!
Then, create an outline for the look of your handbook. This helps determine how you present the information to employees. Once this is complete, write basic introductions to each handbook section that is easy to understand and free of complicated jargon.
Once you assemble all the necessary and up-to-date information, send a finalized version to your company’s legal team to review. Asking for legal counsel ensures that it doesn’t contain statements that may have false information. Once the handbook has legal approval, consider where and how you’d like to publish the handbook. Remember that it should be easily accessible to all employees.
The work isn’t done when the handbook has been distributed to all employees. It should be updated when necessary. Consider reviewing policies at least twice a year to ensure the handbook always has the most relevant information.
Employee handbook examples
When creating a handbook for the first time, it can be hard to envision the final results, even if you understand exactly what needs to be included. To make this easier, it’s best to lean on examples of what some well-known companies have done with their handbooks to spark some creativity.
While some companies gate-keep their handbook, HubSpot lets everyone read it by uploading their culture code onto their network. By sharing it, they practice the same transparency they ask from their employees.
Like HubSpot, Netflix also shares its Freedom and Responsibility culture handbook online. You’ve probably heard about, or read about, their culture before, as it seamlessly defines their culture and values by making them actionable, too.
Project management software Trello uses its platform to outline and display its employee handbook, which they call an employee manual. Each column on the board represents a different handbook section, starting with On Your First Day and continuing with benefits, working remotely, travel, vacation, and miscellaneous information.
Facebook makes its handbook available to anyone interested. Titled Keep Building Better: The Facebook Code of Conduct, their manual features a message from founder Mark Zuckerberg, along with sections about mutual support, protecting and empowering people, competing and collaborating, and engaging with the world.
Another interesting example of a well-done employee handbook is the one Basecamp has created. It utilizes a unique tone of voice, making sure the company’s personality stands out from other employers. Some notable sections are What We Stand For, Where We Work, Our Rituals, and Vocabulary.
The handbook knows all!
As the workplace continues to evolve, it’s likely up to the role of a human resource professional to ensure the handbook stays up to date with the latest information.
It’s important to remember that your employee handbook is not a legally binding document and does not ensure compliance. However, it can help protect your company from certain liabilities and communicate clearly with all of your employees by being the one cohesive location for important company details.
A comprehensive handbook is one thing. Now it’s time to look at your company’s culture to build a modern workplace for everyone.
This article was originally published in 2019. It has been updated with new information.