20 Essential HR Policies Every Company Must Cover

The HR compliance landscape is continually evolving. Businesses have no choice but to keep up or become subject to fines and other penalties. Company leaders aren’t always aware of (much less fully understand) their company’s compliance needs.

Make sure your business is fully covered with these essential HR policies. Include these 20 must-haves in your employee handbook to avoid unnecessary conflicts.

What are HR policies?

Human Resources policies are a set of guidelines and resources outlining all aspects related to your workforce and your workplace. All companies have rules and expectations for how to perform work and provide service. These policies are developed by HR with input from company leadership.

Since people are undoubtedly complicated, companies need numerous HR policies to manage the way people work and clarify your expectations for employee behavior, performance, and development. It is critical to clearly define all policies before issues arise so HR, management, and employees know what to expect.

HR policies should essentially cover everything work-related, including:

• Hiring
• Onboarding
• Various work processes
• Compensation
• Employee Benefits Offering
• Time & attendance, PTO, and leave
• Training and continuing education
• Work environment and behavior expectations
• Company property rules
• Termination and offboarding
• Other important HR and company functions

What is the purpose of HR policies?

HR policies reduce the burden on managers by putting expectations and consequences into writing. If two employees receive different treatment for similar behavior, then your business may be vulnerable to discrimination lawsuits. Clear HR policies help manage expectations and reduce the liability for your company.

When developing HR policies, make sure that you’re compliant with local, state, and federal laws. Use HR policies to keep your company compliant with FMLA, Affordable Care Act, local minimum wage laws, and any anti-bias and harassment laws. Include these must-haves in your employee handbook. Always remember to get employees to sign and confirm they received a copy. 

Key elements for HR policies

Broadly, your policies need to cover a few key elements. At the most basic level, you need to explain your expectations for employee behavior. Each behavioral policy’s rules and possible consequences should provide guidelines for managers and supervisors. You’ll also want to include reporting options for employees who believe they’ve experienced or witnessed inappropriate behavior. 

When these HR policies appear in the employee handbook, it’s good to start with the company’s goals and values. Don’t get too negative by focusing on the punishment for bad behavior. HR policies should also include positive items, such as professional development opportunities, raises/bonuses, and promotions. 

Top 20 Essential HR Policies:

At-Will Employment

Depending on your state and local laws, your company should assert at the beginning of the handbook if they’re an at-will employer. Under at-will employment, employees are allowed to quit and employers are allowed to fire employees without giving a reason.

Anti-Harassment and Non-Discrimination

Even at-will employers need stated policies to prevent discrimination and harassment according to local, state, and federal laws. An anonymous reporting system can help you better identify and address problematic behavior.

Employment Classifications

Explain how you classify employees as exempt or non-exempt and full-time or part-time. Which types of employees are eligible for benefits and overtime pay? Since they aren’t employees, independent contractors will be outside the scope of most HR policies.

Leave and Time Off

How much time off do employees accrue annually? Breakdown PTO, vacation, and sick day policies. How is the time off accumulated, especially in an employee’s first year? Explain your bereavement policy and how employees request or schedule time off. Make sure to abide by FMLA requirements.

Timekeeping

What are your expectations with attendance and punctuality? What timekeeping system are you using? When hourly employees punch in late or forget to clock their time, you’ll need clear policies. Explain break period limits and mealtimes.

Pay

What’s your payday schedule and process? Does your company use paper checks, direct deposit, or paycards? Let employees know how to access payroll information, whether they use paper request forms or sign into payroll software. Hourly and salaried employees have different compensation. Are employees evaluated for raises at annual evaluations? How do bonuses and benefits affect taxable income?

Company Property

To minimize lost equipment, employees need to sign for receipt of company property. Provide rules for the use of equipment, especially computers and phones.

Safety and Health

Workplace safety is everyone’s responsibility. Employers must comply with OHSA laws and regulations. Include any new policies and long term guidelines that your company developed as part of the COVID-19 Response.

Employee Conduct

How will HR respond to unsafe behavior and harassment? Depending on the severity of the problem, your managers need a choice of disciplinary actions. What types of first-offenses and repeated behavior problems would justify termination? 

Workplace Attire

You may not want to regulate employee clothing, but it’s difficult to safely address inappropriate clothes without an existing policy to reference. Avoid relying on ambiguous terms like “business casual” and include specific exceptions for social employee events and casual Fridays. Some industries will need to emphasize safety requirements and equipment. 

Business Expenses

Whether they’re traveling or equipping a home office, how can employees request reimbursement for expenses? Provide examples and guidelines for which expenses can and cannot be covered by the company. For transparency and to limit the excess paperwork, include the maximum reimbursement amounts.

Reasonable Accommodations

Check out the state and federal guidelines that apply to your industry. In most cases, you’re required to make reasonable accommodations for anyone with disabilities or sincere religious beliefs.

For example, a female Muslim employee’s headscarf might technically violate your dress code, and it would be reasonable for you to simply make an exception. On the other hand, if the employee operates machinery where a loose headscarf would create a safety hazard, then you may have to work with employees to find a mutually acceptable compromise. 

Performance Reviews

How frequently should employees expect performance reviews? Describe your evaluation process,  performance metrics, and any incentives for stellar work. 

Social Media

Are employees active on social media during the workday? Unfortunately, an employee’s personal activity on social media can attract negative attention to your company. Be careful about regulating what they say outside of business hours.

For employees with access to the company’s social media accounts, specific guidelines for online behavior is necessary to avoid PR reputation issues.  

Remote Work

When you develop a long term remote work plan, include an overview with other HR policies. How do you handle company equipment and email response times? A hybrid office and windowed work make remote schedules more flexible.

Drug and Alcohol

Explain your policies for testing job applicants and employees. Drivers may have mandatory testing after an accident. Most companies will have rules against bringing drugs and alcohol onto company property. Include an overview of the disciplinary consequences for testing positive or bringing banned substances to the office.

Weapons in the Workplace

Plan ahead to prevent violent and threatening behavior. Taking regional laws into consideration, you may choose to ban all weapons in the workplace. Define which types of items would be considered weapons. Give examples of disciplinary measures for responding to incidents.

Workplace Confidentiality

Legally, you can’t forbid employees from talking about their compensation or working conditions. Still, it’s good to clarify in writing that trade secrets and client information are confidential.

Non-Compete Agreements

It’s hard to enforce confidentiality agreements if ex-employees go to work for the competition. Usually lasting from six months to two years, non-compete agreements keep former employees from immediately working for your direct competition.

Office Relationships

How will you handle office relationships? What if relationships develop between managers and their subordinates? Define what constitutes a consensual relationship and how it differs from harassment. Use a relationship disclosure statement to protect the company and clarify your expectations about appropriate behavior.

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