An employee handbook can seem unnecessary when you’ve got a small team. But it shouldn’t! Though you’re not required by law to have a handbook, recording key policies can protect your business. Plus, it gives your employees the clarity they need to know how things work.
What’s an employee handbook, again?
An employee handbook 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. This 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, 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 just means that either party can end the relationship at any point for any reason, with or without notice.”
2. Standard of conduct
Even the most free-flowing organization has boundaries. This 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
- 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 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. Set out your expectations for channels such as:
- Social media
5. Compensation & 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:
- Payroll schedule
- Paycheck deductions
- Job classification details
- Salary and bonuses
- Performance reviews
- Promotions and transfers
- Travel and expense policy
Woohoo! Here’s where you list out the perks 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 who’s 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:
- Health, disability, life, and workers’ comp insurance information
- Retirement plans
- Paid time off (PTO)
- Other leave policies, such as parental leave, sick leave, or jury duty
7. When someone leaves
It happens: Sometimes you just need to part ways. This section should explain what happens when someone moves on — whether they do so by choice or not. Explain the offboarding basics, such as:
- When they’ll receive their final paycheck
- How exit interviews work
- How Consolidated Omnibus Budget Reconciliation Act (COBRA) benefits work if someone is laid off or fired.
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 handbooks?
Gusto conducted a survey of more than 330 businesses to find out what they’ve prioritized in their handbook. Here’s a behind-the-scenes look at their employee policies.
|Policy||1-9 employees||10-200 employees|
|Company mission and values||26%||53%|
|Use of company equipment||22%||49%|
|Salary and bonuses||20%||53%|
|Lunch and break periods||19%||53%|
|Email and internet usage||18%||50%|
|Travel and expensing||16%||41%|
|Termination and offboarding||13%||41%|
|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 handbook shine.