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Employee Handbook

Your company’s employee handbook serves as the rulebook for employees and sets expectations for both employees and employers. A well-drafted employee handbook also protects your organization from potential legal claims.

Continue reading to learn what an employee handbook is, why they’re important, what policies and procedures to include, how to create one and examples of great employee handbooks.

What Is an Employee Handbook?

An employee handbook is an official document that outlines your organization’s policies and procedures. New employees should receive a hard copy of the handbook on their first day. There should also be an easily accessible, interactive online version of the handbook.

Every employee should sign to acknowledge that they’ve received and read the employee handbook. This document goes into the employee’s files and covers your organization if an employee violates the procedures outlined in the handbook.

Why Are Employee Handbooks Important?

Employee handbooks set the rules and expectations that your company applies to your employees. A comprehensive employee handbook is important to your company because it:

  • Outlines rights and responsibilities for the employee and the employer. Providing an overview of the rights and responsibilities for both the employer and the employee helps to clarify uncertainties and protect both parties from potential lawsuits.
  • Reduces time spent answering questions during onboarding. Clearly outlining all policies and expectations will reduce the number of questions asked during onboarding, allowing new employees to use their time training or acclimating to their new environment.
  • Clearly defines and communicates policies. Creating an employee handbook sets definitive policies that apply to all employees, creating a sense of fairness in the workplace.
  • Provides a document that HR and management can refer to for discipline. When an employee violates company policy, HR and management can refer to the employee handbook as support for any discipline that follows.

What to Include in an Employee Handbook

The specific policies and procedures included in an employee handbook vary depending on your company culture, values and the industry you work in. The following information is typically included in employee handbooks across all industries and company sizes.

Welcome Statement

You should open your employee handbook with a general welcome statement along with a summary of the company’s history and mission. The main purpose of an employee handbook is to cover legal grounds, but you can use it to create a welcoming environment and positively impact employee morale.

At-Will Statement

After welcoming your new employees, you should include a clear statement explaining that employment is at will and nothing in the handbook alters that status of employment. Be sure to specifically call out if there is any signed employment agreement for a specified term that eliminates the at-will.

The at-will statement should also be reinforced throughout the handbook in any policy that suggests employment may be terminated only for specific reasons or at a specific time.

Contract Disclaimer

Include a contract disclaimer that clearly states the employee handbook is not intended to and does not create a contract of employment or guarantee terms and conditions of employment. This reduces an employee’s ability to assert a breach-of-contract claim for failure to adhere to the terms or the employee handbook

You could also consider having the handbook serve as a contract and drafting it so that the terms can be effectively enforced against those who violate the policies outlined. Either way, make sure to include a clear statement that employers reserve the right to change, revise and amend any policies included in the handbook.

Equal Employment Opportunity Statement

Employers should have a clear equal opportunity statement prohibiting discrimination in employment based on any characteristics protected by federal and state employment legislation.

Including this statement protects your company from any repercussions of federal and state laws prohibiting employment discrimination and requiring equal employment opportunities.

Policy Against Unlawful Harassment

To create a safe work environment, you need to establish a policy against all forms of unlawful harassment, including sexual harassment.

Your policy should not only prohibit harassment, but it should set a reporting procedure that you can use to show that you took reasonable steps to prevent and correct unlawful harassment in the workplace in the event of a workplace harassment claim.

Commitment to Provide Reasonable Accommodations

There are federal and state discrimination laws that prohibit you from discriminating against an applicant or employee with a disability. You’re required to provide reasonable accommodation for applicants or employees with a disability, where the accommodation does not cause undue hardship.

Include a statement highlighting the company’s commitment to providing reasonable accommodations where available.

Leave of Absence Policies

Your employee handbook should cover leave of absence policies, including medical leaves of absence under the Family and Medical Leave Act (FMLA) and any applicable state laws.

Separation Policies

Although new hires are just starting with your company, it’s imperative that you include separation policies. Some items to include are terminal-pay policies and exit interview procedures.

Disciplinary Policies

Disciplinary policies can range from your attendance policy to prohibited employee conduct. You should have a clearly defined set of disciplinary actions for each respective policy.

Wage and Hour Policies

Within your employee handbook, include information about employee classification, overtime eligibility and procedures, meal and rest break policies and any other information pertaining to wages and hours.

Other Policies

There are numerous other policies you can include in your employee handbook depending on your industry and company. Some policies to consider include:

  • Workplace safety policies
  • Electronic equipment usage and communications policies
  • Conflict of interest policy
  • Whistleblower policy
  • Open-door policy
  • Employee grievance policy
  • Benefits descriptions and disclaimers
  • Immigration law compliance policy

How To Create Your Employee Handbook

Once you know what policies and procedures to consider, you can take the following steps to create your company’s employee handbook.

1. Compile Your Company’s Policies and Procedures

Collaborate with executives and high-level management to consider which laws apply to your company and what policies should be included in the handbook based on size, geography and other factors.

If you’re updating your handbook, meet with executives and high-level management to identify what policies need to be updated or removed.

2. Create an Outline of Your Handbook

After collaborating with executives and leadership, take all of the policies discussed in your meeting and organize them into a rough outline of your handbook.

3. Summarize Each Policy and Procedure

With each outlined section, summarize each policy and procedure in a way that is easy to understand, avoiding complex legal terms.

4. Develop the Final Handbook

Once you’ve summarized each policy and procedure, place them in the appropriate section within the outline to develop the final, completed version of your employee handbook.

5. Have Your Employee Handbook Reviewed by Legal Counsel

Because of the continually changing federal and state employment laws, have your handbook reviewed by legal counsel that is familiar with the state and local laws where your company has employees.

6. Publish Your Handbook in Several Mediums

When you have all of your policies legally approved, publish the final handbook in physical form, as a PDF and as an interactive training resource that employees can refer back to.

7. Incorporate Your Employee Handbook Into Onboarding

At the end of your employee handbook, include an acknowledgment that the employee received the handbook and agrees to comply with the policies that were set forth within it.

Ensure that each employee signs the acknowledgment to have concrete legal support if an employee must be disciplined for violating the handbook.

8. Keep Your Employee Handbook Updated

Out-of-date employee handbooks expose the company to avoidable legal claims. Review your employee handbook regularly to confirm it’s still in compliance with laws and accurately describes your company’s policies and procedures.

Update your handbook annually or whenever there is a material change in the law or your practices.

Examples of Great Handbooks

You can use the following employee handbook examples as inspiration when creating your employee handbook.

  • Valve Software. The software company communicates through relatable writing and concise summaries of its policies and procedures. They create a narrative throughout their employee handbook and incorporate illustrations to create a positive reading experience.
  • Netflix. Netflix’s employee handbook is centered around the behaviors and skills that they hire and promote based on. They tie these attributes together with their policies and procedures to create an easy-to-consume experience for their new and current employees.
  • Hubspot. With a sleek design and creative construction, Hubspot has one of the best employee handbook examples for a modern work environment. Hubspot showcases its company culture and values while covering the legal bases required in an employee handbook.

Questions You’ve Asked Us About Employee Handbooks

Are we big enough to have a handbook? When do we need to make one?
No matter how many employees you have in your company, you are big enough to have an employee handbook. Every company should have an employee handbook to outline legal policies and expectations in order to avoid potential legal ramifications. You can make your employee handbook using word processing software, online employee handbook templates, capabilities within your HR software or outsourcing to a third-party handbook provider.
What should I do if the policies described in our handbook change?
If the policies described in your employee handbook change, update your handbook accordingly. Additionally, it is recommended that you review and update your employee handbook annually to ensure that it accurately reflects current legislation and company values.
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