Traditionally, employee handbooks have been snooze-inducing legal documents crafted or at least reviewed by a lawyer with the goal of protecting an employer from lawsuits and fines. But the definition of an employee handbook is expanding. Recently, companies have begun using employee handbooks in a different way: to define and publish their company culture for employees and recruits alike. These culture handbooks set the tone for interactions throughout a company and paint a picture of what new employees can expect upon joining. So when do handbooks matter to you, and which kind should you have? Depending on your company’s size, you may have one, both, or none.
The legal version
A CYA handbook protects a company by recording official policies and making them available to all employees. There are a few major cutoffs for when the law says you have to comply with certain things:
- One and five employees in California: The CA Department of Fair Employment and Housing (DFEH) prohibits employment discrimination at five employees and workplace harassment at one.
- 15 employees: Federal protection of workplace discrimination (except for age) and harassment kicks in and is enforced by the Equal Employment Opportunity Commission (EEOC).
- 20 employees: Federal protection of age discrimination starts.
- 50 employees: Companies must comply with the Family Medical Leave Act.
Boring? Yes. Important? Also yes. The law doesn’t require a handbook, but having one manages risk by proving that you’ve told employees what is and is not acceptable behavior. Most lawyers would recommend you create a custom handbook before you hit 15 employees, but most companies don’t follow that advice. They might download a template, re-purpose one they’ve used at a previous company, ask a friend for theirs, or use whatever boilerplate version their PEO provides. In general, it gets the job done, but there’s still some risk because many of these templates are wrong or out of date. By the time you approach the 50-employee mark, we recommend that you talk to your lawyer or an HR professional about getting a custom handbook for your company.
The culture version
Company culture is immeasurably important, and when you start hiring people outside of your existing network, managing it becomes a big deal. You want to grow without muddling up the awesome company and environment you’ve built. Company culture is like a balloon: each new employee breathes fresh life into it, but one prick can pop the whole thing.
You probably already strive to only hire people whose beliefs and values match yours. A culture handbook can help by putting in writing the things that your recruiters (every employee) and recruits both need to know:
- Your mission and vision
- Your core values
- Your beliefs or principles
Recording and publishing your culture doesn’t replace living it every day, but it serves as a good reminder for everyone. A culture handbook makes it clear that you reward those that live your values and beliefs and bid a respectful but quick adieu to those who don’t.
So when do you put one together? When you feel the pain! When you first start your company, your culture is YOU. Then you hire people you know (and know you), and that culture is reinforced. Once you start trying to hire people outside your network, you begin to feel the pains of finding the right person and getting them integrated. Culture can be maintained organically for a while, but we’ve found that around 25 employees is the time to begin putting systems in place to promote and reinforce the culture you’ve worked so hard to cultivate.
Wrapping it up (aka TL;DR)
The legal version and culture version of an employee handbook are two important but separate things. Ideally you would have a legal version as early as 5 employees, and you should definitely work with a lawyer to do it the right way before you hit 50. For the sake of your culture, write down and publish your values and beliefs as soon as you know what to write down, and no later than when you start hiring people you don’t already know.