The Ultimate Guide for Creating An Employee Handbook (Including 15 Must-Haves)

Does your company have an employee handbook? If not, then you really should create one—no matter the size or industry of your company.

Is your employee handbook up to date? If not, then you should strive to update it regularly to ensure safety, compliance, and engagement.  

A well-written company handbook gets your whole workforce on the same page. Inspire new hires and tenured employees alike to help fulfill the company mission and goals. More than just a handbook for discipline and misconduct, your team needs a handbook that helps everyone succeed together.

What exactly is an employee handbook?

An employee handbook is an official company document that outlines company policies and makes employee expectations clear and referenceable. If you need to fire an employee over attendance issues or conduct, your handbook should show that you have proper documentation and cause.

Most employers also include other legally required information, such as FMLA and OSHA guidelines. You may want to consult legal advice on your employee handbook to help avoid language that could be interpreted differently.

Like the owner’s manual in a new car, your employee handbook may only get a quick skim from new and older employees alike. Even if they are not read cover-to-cover, they’re meant to be a resource for answering major policy questions and rules.

The exact contents of an employee handbook can vary from one company to the next. But when employees have easy access to a handbook, they won’t have to bother supervisors and HR to explain things like your company’s PTO and vacation policy over and over again. 

Why are employee handbooks necessary?

If it wasn’t already obvious, employee handbooks are important and can accomplish several things at once. Here are just a few of the reasons to develop a quality handbook:

Legal requirements

No, you aren’t legally required to have a handbook, but they make it easy to meet several other legal requirements, such as FMLA and other federal policies. When new hires sign for their handbook, you have proof that they received all the required documents and policies included.

Compliance & legal clarifications

The EEOC protects workers against discrimination and harassment. Departing employees will also be eligible for COBRA healthcare coverage. The handbook is a great way to handle some questions and ensure compliance with state and federal requirements.

Introduce employees to culture, mission, and values

Your company values can’t be forgotten immediately after onboarding. Including them in the handbook is a commitment that encourages employees to take those values more seriously. Make sure your mission statement accurately reflects the experience of all employees. 

Communicate employee expectations

Without clear expectations, company policies, decisions, and consequences may seem arbitrary. From dress code to productivity, your company has numerous expectations. Work with a lawyer to make sure that your wording doesn’t endanger your employment-at-will status. 

Clarify company policies 

Some policies need to be communicated early, like information that would apply during training. Other policies are too easily misunderstood, like the accumulation of PTO. Continual communication and documentation are great for explaining policies and referencing specifics.

Help with onboarding

A detailed company handbook isn’t a substitute for a proper onboarding experience, but it’s a great tool for improving the onboarding process. You still need to discuss policies and answer questions, but most will look up answers for themselves and trainees won’t feel as overwhelmed by information.

15 essential must-haves for Your employee handbook

Not sure what to include in your new or updated employee handbook? Here are a few must-have topics to be sure to cover:

At-will employment clause

Where applicable, emphasize your at-will employment status. You don’t want your handbook to be interpreted as an employment contract or guarantee. Get a lawyer’s input on your final draft.

Code of conduct

What are your expectations for employee conduct? Address issues like potentially criminal behavior and the misuse of company internet. Get legal advice and make sure that it doesn’t sound like you’re forbidding protected behavior like the discussion of workplace conditions.

Time and attendance policies

What are your expectations for hourly and salaried employees? How do you manage timekeeping and overtime? How do employees request time off? Explain how your company handles PTO, vacation, holidays, and bereavement. 

Overview of benefits

Give a general summary of employee benefits like health insurance and retirement plans. Let employees know where to go for more detailed information. To avoid updating the handbook repeatedly, skip specific policy details that change frequently, like rates and percentages.

Remote/hybrid work policies

Many companies recently discovered the advantages of remote and hybrid workers. If you don’t already have one, develop emergency and long term remote work plans for your company. 

Scheduling and overtime policies

For what wasn’t included in your Time and Attendance, clarify how you compensate for overtime and make schedules. Can employees resolve scheduling conflicts by swapping shifts? HR software makes it easy for employees to resolve their own scheduling conflicts. 

COVID-19 policies

How has your workplace responded to pandemic guidelines? Describe any policies your office has developed for masking, vaccinations, social distancing, or remote work.

Legally mandated policies

Some policies are required to be posted visibly in the workplace and made accessible to employees. To ensure exposure, include these in employee handbooks as well:

• Family Medical Leave Act (FMLA)
• Occupational Safety and Health Administration standards (OSHA)
• Equal Employment Opportunity rules (EEO)
• The Civil Rights Act of 1964

Drug-free workplace policies

Even if your company doesn’t require drug testing, it’s best to establish a company policy before an incident arises. Take into account things like marijuana legalization in your location.

Final paycheck and unused PTO

Make sure that you follow state laws about end-of-employment issues. Some states require employers to pay out the remainder of unused vacation time and PTO.

COBRA information

If you offer employees health insurance, then departing employees need to be able to enroll in COBRA. You’ll still want to address COBRA as part of your offboarding checklist, but including details in your handbook will introduce the topic and provide guidance.

Sexual harassment & bullying policies

Make sure that your company clearly defines sexual harassment and bullying in the workplace. Hypothetical examples and repercussions will help make things clear. Be sure to inform employees on how to report incidents and the plan/timeline for how your company responds.

Social media policies

You don’t want employees wasting the workday on social media, or posting something that can negatively affect the image and reputation of your brand. Be careful not to violate their personal right to free speech when employees post on their own time. 

Performance evaluations, promotions, and pay raise policies

Do you use Performance Management software? How does that factor into raises and promotions. The employee handbook should outline your employee review process, as well as the requirements and/or timeline for granting raises or promotions.

Employee acknowledgement of handbook and policies

Make sure employees sign to confirm that they received a copy of the handbook during onboarding, or whenever updated. Keep signatures on file to prove that all employees are aware of company policies.

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