11 Company Policies Every Business Needs

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Running a business requires a lot of structure. Without it, any business would not last very long. The structure of company policies helps provide stability necessary for long-term success.

Your company should have a diverse set of policies that are appropriate for your goals. Knowing which ones to have and how to write them is a key factor in building a strong organization.

Key Takeaways:

• It is important that companies strike a fair balance in their policies to protect all parties.

• Writing a company policy requires thorough legal reviews.

• A healthy set of company policies provides expectations that set productive standards.

• Most employee policies are handled by the human resources department.

What Is a Company Policy?

A company policy is a formalized set of rules or expectations that an employee agrees to when they are hired. Employers develop company policies to provide guidelines and standards for their operations, which can vary depending on their circumstances.

Some company policies are only applicable while the employees are at work, while others must be upheld at all times during the duration of their employment.

As an employer, you must be mindful of the company policies you have in place. If you have too many, you may bog down efficiency or face low employee morale. If you have too few, you may suffer from high employee turnover or face serious legal repercussions.

Picking the right company policies is critical to building a healthy and productive work environment.

11 Essential Company Policies

While company policies vary between organizations, there are several that every business will want to have in place to ensure stability, such as:

1. Workplace health and safety policy. Every organization needs a workplace health and safety policy to protect its employees from harm. Not only is it ethical for companies to be concerned about the health and safety of their workers, but employees who get sick or injured due to work will cost companies in terms of productivity and worker’s compensation payouts.

   Additionally, there are many state and federal regulations that businesses must comply with to avoid legal repercussions. The Occupational Safety and Health Administration (OSHA), in particular, keeps a close on maintaining standards.

2. Equal opportunity or anti-discrimination/harassment policy. Businesses cannot afford to be complicit in discriminatory and harassing behavior. If they are, it will result in low employee engagement, high employee turnover, as well as a loss of clients and other business partners.

   An equal opportunity or anti-discrimination/harassment policy in place keeps workers safe and allows them to perform better. Additionally, it keeps your business compliant with the law. The Equal Employment Opportunity Commission (EEOC) and other government agencies can hit businesses with serious legal action that fails to uphold the rights of their employees.

3. Employee code of conduct policy. As an employer, you are allowed to set standards of behavior that you expect from your employees, which are outlined in your code of conduct policy. You may also use the code of conduct to explain policies and procedures related to behavior, including dress code, social etiquette, communication standards, and work ethic.

   Code of conduct policies are helpful because they are legal documents that can be used to justify disciplinary actions of the employer on employees who fail to uphold the policy. Employees generally have to agree to code of conduct policies when they are hired by providing a signature.

4. Compensation and benefits policy. A compensation and benefits policy details exactly how employee salaries, wages, raises, bonuses, or commissions are paid out. Benefits such as health insurance, retirement plans, stock options, education reimbursement, or additional perks will also be discussed. It is possible for this policy to address certain tax compliances as well.

   A detailed compensation and benefits policy helps attract and retain qualified workers. Employees like it when their companies put effort into providing a fair and diverse approach to the rewards that come with their employment. As an employer, you can also use this policy to clarify future financial decisions if you face budget issues.

5. PTO, sick days, and attendance policy. This policy discusses everything an employee needs to know about when and how they can take days off from work. Your policy will provide how vacation days are accrued, what qualifies as a sick day, and when employees are expected to be at their jobs.

   Such a policy can further explain what employees need to do for extended leaves of absence, such as the use of FMLA or maternity/paternity leave. It is important for employees to understand when they can take time off and how they should go about it to avoid no-call and no-shows, which should also be addressed in the policy.

6. Disciplinary policy. A company’s disciplinary policy details how punitive action is taken for unacceptable workplace behavior. This can range from written warnings and suspensions to outright termination. The disciplinary policy should accommodate all other policies, such as the conduct and anti-discrimination policies, that set expectations for employee behavior.

   It is important that employees understand the rules before discipline is taken; otherwise, you may face retaliation. Clearly outline the degrees of consequences an employee may face due to certain infractions.

7. Technology and social media policy. A technology policy includes how employees should treat company property, as well as what they should do with their own personal technological devices, most especially computers and cell phones.

   The policy should explain what employees can and cannot do when they use the internet for personal use. This is especially important for social media use and can even detail how social media activity can lead to disciplinary action.

8. Intellectual property policy. Many companies that manufacture either physical or digital products need to clarify ownership to avoid future lawsuits and competing claims. An intellectual property policy discusses what constitutes IP, such as copyright, patents, and trademarks, and to whom it belongs.

   Employees should know in advance how their contributions may or may not be considered the property of the company to avoid harmful misunderstandings.

9. Information security. Similar to intellectual property, businesses must protect their digital assets. This policy outlines how the company defends itself against cyber attacks, including what they expect out of their employees to avoid vulnerabilities, such as password requirements and other security restrictions.

   An information security policy needs to be adaptable and stay up to date with the latest threats. Therefore, inform your employees whenever changes are made.

10. Privacy policy. Businesses must protect the private data of their organization, including the privacy of their employees, clients, and business partners. This can be required by law depending on circumstances, but also it is good business practice.

    A privacy policy establishes trust between a company and its stakeholders, which allows for more productive growth.

11. Remote work policy. With the rise of remote work in the economy, companies need to establish a clear policy regarding its use. A remote work policy defines if and when employees can conduct their work remotely.

    For example, a company that implements a hybrid schedule might only allow employees to work three days a week remotely. In addition, this policy may explain the required resources for remote work, including VPNs, company hardware, and the ability to conduct video conferences.

How to Write a Company Policy

Consider the following steps to create a successful company policy:

1. Tie policy goals to organizational needs. Whatever policy you want to put in place needs to consider your company’s mission, values, and objectives. A good policy aligns with these needs and helps promote them. This is because any policy sets expectations that act as a representation of organizational goals.

   Additionally, it is important to prioritize your policies, so make sure you know what it is about the policy that is most critical to your company’s success.

2. Research policy, resources, and logistics. It is very likely that the policy you want to put in place already exists somewhere else. Look up case studies and best practices for the policy to determine if it is something you wish to pursue.

   You will also want to research the resources and logistics that go into implementing a policy. Some policies, such as information security or a remote work policy, may require you to set up a secure VPN for your employees to communicate safely with your organization.

   It may also be helpful to get feedback from employees or other stakeholders that will be affected by your policy. You may learn new information that you will want to incorporate into your policy. It will also ensure a smoother transition into the policy if your stakeholders feel like their voices were heard during its creation.

3. Write and review policy, including legal review. Start with a draft of your policy so that you can review its strengths and weaknesses. The policy’s intent and procedures should be clear to understand. It is also important that your policy addresses your organizational priorities while also appropriately merging with current policies.

   Almost every policy has some sort of legal implication, so make sure to get your policy reviewed by a qualified legal professional. They should be able to tell you whether or not your policy meets certain regulations and if it would hold up against any retaliatory legal action.

4. Prepare employees and stakeholders. Your employees, clients, or affected business partners should be made aware of any policy changes before they are implemented. This gives them time to adjust accordingly.

5. Implement policy. If possible, announce your policy through email and provide details. Make it clear who has the authority to manage your policy and provide contact information for employees or other stakeholders who have comments and concerns. Understand that it may take people a few days to get on board with the policy, so make an extra effort to make people aware.

6. Evaluate policy, and revise if necessary. No policy is perfect, and over time even the best ones become outdated or irrelevant. Therefore, put a system in place that periodically evaluates your policy to determine its appropriateness. Many policies over time need to be adjusted as changes in legal requirements or economic trends dictate new work environments.

Tips for Writing a Company Policy

When you write a company policy, it can be very useful to:

• Make your policy easy to understand. Employees and other stakeholders probably won’t thoroughly read the policies if it is dense and filled with legal jargon. You may need to still provide such details; however, you should still provide accurate summaries that are more accessible to the average reader.

• Keep your policy fair and consequences just. Any successful policy takes into account all those involved. Make sure your policies address the needs of its stakeholders, which includes disciplinary action for policy infractions.

• Always conduct a legal review. Policies are directly tied to a company’s legal standing. Any improper or missing policy can result in disastrous consequences if they are not compliant with regulations.

• Provide easy access. Any employee or stakeholder who has a question about a policy should be allowed to read it if requested. This ensures accountability on all sides.

• Tailor policies to your company. What’s best for one company isn’t always best for another. You may have similar goals in mind, but your policy should reflect the mission and values of your organization if you want to align people’s behavior effectively.

Why Are Company Policies Important?

Company policies are important because they:

• Protect employers and employees. Many policies are designed to protect the interests of a company and the rights of the employees. They are crucial to striking a key balance between the two parties. Employers want to be sure they can structure their companies as they see fit, while employees want to be guaranteed their most basic needs are upheld.

• Sets clear expectations. Policies are a proactive approach that helps avoid unacceptable behavior. Most employees and stakeholders will act accordingly when informed of policies. Those who do not and are reprimanded at least have an explanation for facing the consequences.

• Creates legal compliance. Federal and state laws require companies to fulfill certain responsibilities, like providing safe work environments free from discrimination. When a business has a robust set of policies, it can feel confident that they are following regulations.

• Keeps company adaptable. As the economy experiences changes, new policies are needed. This is especially true for staying current with trends that help attract employees, such as providing flexible schedules or protecting employee privacy.

Company Policy FAQ

1. What policies should every business have?

   There are several policies every business should have:

   • Equal opportunity or anti-discrimination/harassment policy

   • Workplace health and safety policy

   • Employee code of conduct

   • Disciplinary policy

   • Compensation and benefits policy

   • PTO, sick days, and attendance policy

   These are all important policies because, regardless of the industry, they make sure a business can run effectively while also staying compliant with regulations.

2. How do you write a company policy?

   To write a company policy, you need to:

   • Align policy with organizational needs

   • Research policy, best practices, resources, and logistics

   • Review, including legal review

   • Prepare stakeholders

   • Implement

   • Evaluate and revise

   When you write a company policy, each step provides a foundation to strengthen the policy’s impact. In the end, your goal is that your policies contribute to your company’s success.

3. What department handles company policies?

   Human resources are the department that handles most company policies. This is because they are in charge of handling workforce relations and legal compliance.

   However, other policies that affect external stakeholders, such as clients and business partners, may have their policies managed by a company’s legal team. Technology-based policies may also be handled by a company’s IT department.

4. Why is every company updating its privacy policy?

   Many companies are updating their privacy policy to comply with the Europe Union’s General Data Protection Regulation. This law went into effect in 2018 and still has important repercussions. Additionally, due to changing technological trends and other laws, companies frequently revise their privacy policies.

References

• Small Business Administration – Stay Legally Compliant

• U.S. Department of Labor – Summary of the Major Laws of the Department of Labor

• Equal Employment Opportunity Commission – Create Employee Policies

Author

Conor McMahon

Conor McMahon is a writer for Zippia, with previous experience in the nonprofit, customer service, and technical support industries. He has a degree in Music Industry from Northeastern University and in his free time he plays guitar with his friends. Conor enjoys creative writing between his work doing professional content creation and technical documentation.