Team Management

The Top 8 Policies to Include in Your Employee Handbook

Krystal Barghelame Former Integrated Marketer, Gusto 
The top policies you need in your employee handbook

An employee handbook can seem unnecessary when you’ve got a small team. But it really shouldn’t.

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Though you’re not required by law to have an employee handbook, recording key policies can protect your business. Plus, it gives your employees the clarity they need to know how things work. 

What is an employee handbook?

An employee handbook—or employee manual—is an important living document for your employees that outlines your company policies, history, and culture for current and future employees. Though 87% of small businesses sized 10-200 have employee handbooks, HR experts agree that it’s best practice to start a handbook as soon as you hire your first employee, as it defines expectations and can protect you legally.

Now back to business: here are the main policies you’ll want to record in that employee handbook: 

1. Onboarding and joining the team

One of the top motivations for businesses to create an employee handbook is to train new hires. So kick things off by laying out the basics that every employee should know before the shimmy through the front door.

The employee onboarding section may include your:

  • At-will employment clause
  • Equal employment opportunity statement
  • Conflict of interest statement
  • Confidentiality agreement
  • General details, such as directions to the office, team structure, and key contact info

A quick reminder about at-will employment

If there isn’t an agreement clearly stated in your employee handbook, then this type of employment is assumed in all states besides the Treasure State (also known as Montana).

Here’s an example of a sample at-will clause you can use as a model:

“Keep in mind that [your company] is an at-will employer. This means that either party can end the relationship at any point for any reason, with or without notice.”

2. Code of conduct

Even the most free-flowing organization has boundaries. Your code of conduct section should spell out the “10 Commandments” for life as a member of your team. If there’s anything that’s frowned upon, this section should cover it. For example, you can explain your:

  • Dress code policy
  • Anti-discrimination policy
  • Anti-harassment policy
  • Substance-free workplace policy
  • Taking disciplinary action

3. Office environment

What’s life like at the office? This section of your employee handbook explains how, when, and where employees are expected to get things done. You’ll want to include hot topics like:

  • Work hours
  • Your work-from-home policy
  • Lunch and break periods
  • How to keep the workplace safe
  • Americans with Disabilities Act (ADA) accommodations
  • Use of company equipment

4. Communication policies

How does your team interact with each other? What about customers, vendors, and other partners? Some of this may seem like common sense, but it can still be helpful to spell it all out in your employee manual.

Set out your expectations for channels like:

  • Email
  • Social media

5. Compensation and performance reviews

Not to downplay other critical policies, but the next two sections are ones your employees will likely flip back to frequently.

Here’s a look at the policies you’ll want to cover:

6. Benefits

Woohoo! Here’s where you list out the benefits you offer your team and explain how they match up with the values you celebrate. When someone’s finished reading this section, they should feel knowledgeable and well taken care of.

Open with a quick-reference section that outlines details such as which types of workers are eligible, when benefits kick in, and your plan’s policy number. Then, start with the essentials and work your way up to the icing-on-the-cake benefits:

7. When someone leaves

It happens: Sometimes you just need to part ways. This section of your employee handbook should explain what happens when someone quits or gets terminated.

Explain the offboarding basics, such as:

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8. Your company story

And last, don’t forget to share who you are and why you’re here! (Okay, this isn’t really a policy, but it’s still important).

From your original vision to how your company came into being, your company’s story is the underlying foundation that inspires people to show up and do amazing things every single day. Bring new employees into the fold by sharing this history with them.

Ask yourself:

  • Who is your company and what do you do?
  • Why does it matter?
  • Why should others care, too?

What do other small businesses have in their employee handbook?

Gusto conducted a survey of more than 330 businesses to find out what they’ve prioritized in their employee handbooks.

Here’s a behind-the-scenes look at the most common employee policies businesses include in their handbooks.

Policy  1-9 employees10-200 employees
Work hours31%62%
Workplace safety  29%69%
Company mission and values  26%53%
Dress code  22%56%
Use of company equipment  22%49%
Salary and bonuses 20% 53%
Lunch and break periods19%53%
Substance abuse  18%49%
Email and internet usage  18%50%
Disciplinary action  16%61%
Social media  16%43%
Data privacy  16%46%
Travel and expensing  16%41%
Performance reviews  15%56%
Termination and offboarding  13%41%
Bullying  11%36%
LGBTQ rights  5%23%
None of the above  41%4%

Your employee handbook isn’t just a helpful reference doc; it captures the culture, values, and personality of your company.

Give every policy careful consideration and take time to make your employee handbook shine.

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Updated: January 5, 2021

Krystal Barghelame
Krystal Barghelame Krystal was an integrated marketing specialist at Gusto. She was also a former writer on the Gusto content team and loves terrible pens. Er... puns.


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