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How To Write An Employee Handbook For A Small Business

By Di Doherty - Jan. 11, 2023
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While writing an employee handbook isn’t at the top of most small business owners’ lists, it’s an important step. Employee handbooks can be used to help new employees assimilate, answer questions, and deal with disputes. It can also protect the company from potential legal problems in the future, so long as it lays out the policies properly.

Key Takeaways:

  • Employee handbooks are documents that lay out the company’s policies and expectations for employees.

  • Policies, rules, and expectations should be laid out clearly in an employee handbook. This can include a leave policy, a dress code, and a code of conduct.

  • The handbook is an important, binding document. It should be taken with great importance when written and not released to the employees before it’s complete.

  • It’s a very good idea to have a lawyer check over your employee handbook before releasing it to the company.

What Is an Employee Handbook?

An employee handbook is a document that details the rules and expectations that the company has for its employees, as well as how to handle problems. They unusually include policies on benefits, anti-discrimination, and dealing with disputes.

Depending on the nature of the handbook and the company, they can sometimes also be called a field manual, employee manual, company policy manual, or staff manual. Their length can vary greatly depending on exactly how the company intends them to be used. They may be a repository of all information on policies, or they may be just a quick reference.

Employee handbooks aren’t mandated, which is why not every business has them. However, they are prevalent because they’re shown to help make it easy to access rules, requirements, and policies, as well as help with conflict mitigation.

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What Should Be Included in an Employee Handbook?

Employee manuals help assimilate new employees into a company. In addition, they help with conflict mitigation and make the company’s policies and rules clear. If that’s your purpose for writing the employee handbook, then you’ll need to include information that furthers those aims.

Employee handbooks should include the following:

  • Company information. While not necessarily the first thing the new employee wants to know, most companies put their company information at the front of their handbook. It’s a good thing to include, as it covers the company culture and mission statement, which gives a flavor to the type of workplace they’re entering.

    It’s up to your discretion how much detail you wish to go into here, but there are limits. Don’t make it half of the handbook – this isn’t the information that will help you if there’s a dispute between the company and an employee.

  • Employment definitions. Setting out fair and defined rules is an excellent policy. This section should define whether workers are full-time, contract, or part-time and what the expectations are for each. You should also make it clear what benefits workers do and don’t get for different types of employment.

    So long as you stick to these policies with every worker, you’ve defined the employer-employee relationship and made it clear to everyone what the policies and expectations are.

  • Workplace policies. A few of these policies will be covered in more detail later in the handbook; however, it’s a good idea to lay out basic information here. There will be several cases where that isn’t true, though, so this is the part that you should pay the closest attention to.

    Workplace policies are meant to be a way to avoid disputes, discrimination, and other undesirable problems. So be sure to be clear about what is expected and what won’t be tolerated. Good topics to look into include the following:

    • Confidentially. Employers end up with a lot of employees’ personal information, including their address, marital status, age, and salary. A privacy policy should be outlined, as well as what HR is required to keep confidential.

    • Health and safety. There are health and safety requirements in every workplace. Workers have a right to a clean and safe environment. This section will be more important with physical labor or if employees are working with dangerous chemicals and machinery.

      Either way, though, information should be laid out about safety expectations and how employees can report violations.

    • Harassment and bullying. Harassment and bullying can ruin the workplace and cause qualified employees to leave – never mind the moral and social responsibility the employer has to protect their workers.

      Most employers have a zero-tolerance policy for harassment, discrimination, and bullying. The handbook should lay out prohibited behaviors as well as the repercussions. In addition, it should inform employees how to properly report the behavior.

  • Code of conduct. This section could be covered in the anti-harassment and discrimination clauses, but there are other types of troubling behavior you may want to address. For instance, you may want to set rules for:

    • Social media posts. Most social media shouldn’t be policed. That being said, if employees are saying damaging things about the company, you have every right to take action. The same is true if their posts reflect poorly on the company, such as if they’re discriminatory, vulgar, or glorify illegal activities.

      Many companies would rather not employ someone who displays racist, sexist, homophobic, or otherwise exclusionary behavior. Several people who ended up in high-profile situations like this lost their jobs for that reason.

      In addition, posts that highlight an employee’s violent behavior, stealing, or otherwise illegal acts can also be a reason to punish or let go of an employee, depending on the severity.

    • Phone usage at work. Most jobs are lax about smartphone usage. However, many customer service jobs limit phone usage when there is a customer present. If there’s sensitive equipment, such as in a hospital or laboratory, phone users may also be restricted.

    • Dress code. Dress codes can be somewhat problematic; however, the vast majority of businesses have them as there are certain clothing choices you don’t want employees to wear. This can include clothing with profanity that is highly revealing or isn’t sufficiently dressy to show respect for their position.

      You need to be careful to make the dress code clear but not highlight anything that’s discriminatory or specific to a particular gender, race, or ethnicity. You should also lay out the steps that you’ll take in the case of a dress code violation.

      It should be noted that dress codes for employees that work from home are unlikely to be enforceable. The only time it’ll matter is if they meet or video chat with clients or customers.

    • Conflicts of interest. Many different businesses will list potential conflicts of interest. For instance, if the employee in question ends up working part-time for a competitor or has their own business doing something similar. There should be an outline of what makes a conflict of interest and how it’ll be dealt with.

  • Benefits. The handbook should have a section on employee benefits. This will likely end up varying depending on their exact position and what type of worker they are, but the different types should be outlined. Less typical benefits should be highlighted as well, such as an employee discount.

  • Time off policies. How an employee should go about requesting time off and how much time off they have available should be listed in the handbook. Most workplaces aren’t strict about when an employee takes time off, so long as they stay within the limit.

    Some businesses split it into sick leave, vacation time, and PTO. Others will lump all of them together or only have vacation and sick time and then PTO. Whatever system you choose should be explained in the handbook.

  • Anti-discrimination policies. Modern businesses should make an effort to avoid discrimination and encourage diversity. In some ways, this will tie into anti-harassment and bullying efforts, but it’s a good idea to go further and try to encourage diversity and promote women, people of color, and other minority groups.

  • Medical and family leave policies. Leave policies of this type are required by law. If you choose to offer more time or pay than legally required, then you can list that instead of the legal requirements in your handbook. But employees should be able to find out what their rights are in the case of medical leave.

  • Resignation and termination. A lot of your employees won’t end up staying with your business forever. To that end, there should be information on resignations and terminations. For instance, is the working relationship at will? Or is there an employment contract? Do employees have a severance package? If so, does anything obviate it?

    Information on parting ways is especially important as you dont know when the relationship is likely to sour. Once the employee no longer works for you – especially if they lost their job – is when they might become litigious. And if the information isn’t laid out in the handbook, they’ll have a better argument.

How to Compile an Employee Handbook

Writing an employee handbook is like many other kinds of writing. It requires time, attention, and knowing what it is that you want to convey. Employee handbooks are more binding than a lot of other writing projects, so you want to be doubly careful about what you do – and do not – put in it.

Here are some things to keep in mind:

  • Know what your aim is. What is the purpose of your handbook? Is it to lay out all the policies and rules of the company? Is it to prevent conflict? Is it to help employees with assimilation and problems they may encounter?

    Once you know what you want to accomplish, cater the handbook to that purpose. That may mean that you have to write different handbooks for different departments, but while that takes more work, it’ll make the handbooks far more useful to individual employees.

  • Be clear. This isn’t just a matter of writing well – though that is a large part of clarity. Say what you mean. Lay out the rules in a way that’s clear, consistent, and reasonable. Do the same with policies and benefits. You don’t want people leaving your handbook more confused than when they arrived – then it’s actually a detriment.

  • Avoid exclusionary language. Inclusion is a major goal for many businesses. A simple way to promote that is to do so in your handbook. If you want to use gendered pronouns, switch back and forth between him and her. However, the singular they are an excellent way to be inclusive to men, women, agender, and non-binary individuals.

    Included in this is to avoid terms or scenarios that feel exclusionary to people of different races and ethnicities. The last thing that you want is to hire someone and then have them feel unwelcome because of your handbook.

  • Consider what you’d want to know. This is an excellent yardstick to use. Most people have been an employee at some point in their careers. What did you want to know? What was in the handbook of the company you worked for? Was it helpful?

  • Consider the length. This is a tricky one. You want your handbook to cover all the necessary information, but you also want people to read it. If the handbook is too long, most people won’t even bother to look at it. If it’s too short, it won’t contain the necessary information.

    Having your handbook online can be a help in this. Not only are you saving paper, but more importantly, it makes it searchable. That allows employees to look up information directly related to what they want to know without having to thumb through the entire document.

  • Look at examples. If you’re unsure of how to go about writing a handbook, you should look at other companies. Many of them end up online, allowing you to peruse them. Consider what you like about these handbooks and what you don’t. Think of various problems that you might have and whether or not these would help you solve them.

  • Have someone else read it. This is very important in writing. Another person will catch errors, confusing sentences, and tonal issues that you may miss. It’s even better if they’re familiar with workplace laws and policies. If you have a friend who works in HR, they’d be an excellent resource.

  • Have an employment lawyer check your work. An employee handbook can have legal ramifications, which is why it’s important to have an attorney look at it. They can catch potential legal pitfalls, troubling language, and policies that could be problematic.

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How to Make an Employee Handbook for a Small Business FAQ

  1. Who’s responsible for the employee handbook?

    In the majority of companies, the HR department is in charge of the employee handbook. This is logical as they’re the ones who handle hiring, termination, benefits, and disputes. They’re also the ones who are responsible for communicating many of these policies.

  2. What’s the difference between an employee handbook and a policy manual?

    An employee handbook serves the purpose of explaining employment policies and expectations. A policy manual, on the other hand, explains how to do things. Policy manuals are much more directly related to how the business operates and are usually much more technical.

  3. Should you get your employee handbook reviewed by a lawyer?

    Yes, you should get your employee handbook reviewed by a lawyer. Employee handbooks can be used as evidence in legal disputes, and you don’t want yours to become a liability should that happen to your business. An employment lawyer will know what should and should not be in an employee handbook.

Author

Di Doherty

Di has been a writer for more than half her life. Most of her writing so far has been fiction, and she’s gotten short stories published in online magazines Kzine and Silver Blade, as well as a flash fiction piece in the Bookends review. Di graduated from Mary Baldwin College (now University) with a degree in Psychology and Sociology.

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