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Employers have many obligations including building a business, hiring employees, driving revenue, and focusing on growth. Yet one critically important element is often overlooked even though it should encompass every area of the business.
The employee handbook.
A well-written employee handbook lets your business set the right tone with candidates, those offered a job, and those employed. The employee handbook is far more than a collection of policies and rules. It’s also the opportunity to share the organization’s mission, vision, and values.
Knowing what to include in your employee handbook provides the right framework for your engagement with employees. Here are nine tips — from overtime pay to vacation policies — for new employers looking to create an employee handbook.
1. Understand What An Employee Handbook Is
The employee handbook is fundamentally a collection of information about the company and its operating guidelines. It should include documents, policies and procedures, contact information, and other details that show you the workplace functions.
The employee handbook is also a reference guide for employees, managers, and leadership to handle day-to-day matters and special circumstances.
And most importantly, it is a living document that must and should evolve over time. Your employee handbook needs to be flexible and adaptable. It has to reflect the ever-changing federal and state labor laws, regulations, and company policies that are added or changed.
Consider, for example, how many companies have had to change their guidelines around working from home since 2020. The COVID-19 pandemic has changed rules about the use of company equipment outside the workplace and communications procedures. There have been fundamental, major changes that have shaped how companies operate. Those changes need to be included in the employee handbook.
2. Contextualize Your Company
What matters most at your company? Why does it exist and for whom? Expressing the company’s mission is an important concept to articulate. So too is its vision for the future. Use the employee handbook to express the values and ways of working along with its history.
3. Know What’s Required By Law
Federal, state, and local agencies require certain statements or policies to be explained to employees. The employee handbook is the ideal location for much of that material. The U.S. Department of Labor spells out its requirements on its website. The Occupational Safety and Health Administration (OSHA) also has guidelines on reporting requirements.
4. Articulate Your Pay Policies
Your company likely includes both salaried and hourly employees. You may also use contractors to supplement your staff.
Pay policies need to be clearly articulated. How frequently will people be paid? What is the yearly payroll schedule? Your policies should spell out how time is tracked and verified.
Compensation also includes your policies (and laws) on overtime pay and bonuses.
Pay often goes together with benefits information. Your handbook should explain who is eligible for benefits and when they take effect. Your benefits may include health, dental, vision, life, and long- and short-term disability insurance. In addition, you may offer retirement benefits such as a 401(k), profit-sharing, or stock plan.
Other benefits to include are worker’s comp, unemployment assistance, educational support, and employee discounts.
5. Explain How Time Off Works
Your employees need and deserve paid time off (PTO). Some companies bundle together PTO for vacation, sick days, and other needs. Other companies separate vacation and sick time.
Employees need to know how frequently they accumulate PTO and how they ask to use it and record it.
Your policies also should cover mandated maternity and paternity leaves, bereavement leave, jury duty, and military leave. Be sure to cover the federal Family and Medical Leave Act (FMLA) and whether or not it applies to your business.
Your handbook should communicate standard operating hours for the company and any special dates or events for employees to hold. And don’t forget to include your company’s holiday schedule, too.
6. Spell Out Confidentiality And Privacy Guidelines
Many companies require employees to sign forms acknowledging they’ve read and understand policies. Ideally, these forms should also cover confidentiality.
The policies need to explain what information is protected, especially in medical and educational settings. In addition, employees should understand if they are allowed to use property, specially issued computers or smartphones, for personal use.
Social media use has become an increasingly common policy to include. Employees may be asked to not friend other employees, especially subordinates, on sites like Facebook or Instagram. They may also be asked not to post about controversial topics. If they do, they may need to make it clear their opinions are their own.
Employees should be told if they are subject to digital or physical surveillance if they monitor workspaces (such as checkouts). If you monitor email or file use, articulate those procedures as well.
In the cases of sensitive matters, it’s important your handbook explains why the policies are in place. If employees feel like Big Brother is watching but don’t understand why, it can have a chilling effect on morale.
7. Share Disciplinary Procedures
Workplace conflicts arise. Employees sometimes do not behave or work according to standard norms. Certain items may be prohibited from the workplace, such as weapons or alcohol.
Be sure your handbook explains these restrictions and the consequences. If there are formal procedures in place, detail them. Let people know if there is an appeals process. Whatever rules you include in your handbook, the most important thing is to adhere to them consistently.
8. Explain Review Policies
How will employees’ work be evaluated? Many companies evaluate employees annually, using a standard form or rubric. Some have a preliminary evaluation after being hired, typically after three or six months. Other companies use a rolling, ongoing evaluation process.
Employees should know the frequency and timing of evaluations and how they’re used, such as for raises, bonuses, or promotions.
9. Be Flexible
In some cases, your company may need multiple handbooks. Pay, benefits, time off and other policies may differ among different employee groups, such as those covered by a union.
You may also need different handbooks based on your locations or job areas. Rules for factory employees may be different or more detailed than accounting staff.
No matter how new your company is, reviewing your handbook at least annually is a smart idea. As your company grows and changes, your handbook should reflect that.