A strong employee handbook is the backbone of your company’s culture. It tells employees what you expect of them and what is forbidden. It communicates the company’s tone and philosophy through its rules and guidelines.
But, many organizations have employee handbooks that don’t resonate with employees and fail to communicate the critical messages that influence employee behavior. This article will help you fix that.
(Or, skip ahead and download the Employee Handbook Template. It includes the 50+ sections recommended here and sample text)
Why Use an Employee Handbook?
The most important reason to develop a handbook is because it can be a legal shield.
For example, liability shifts when an employee confirms that they read the rules and understand them. Then, it’s easier for employers to defend themselves in things like wrongful termination lawsuits.
But, get creative and your handbook can be more than just a collection of company policies. Take a look at how these 12 amazing examples have used their handbook as an opportunity to get creative and build a sense of community.
What Goes in an Employee Handbook?
Your handbook should include at least the following sections:
Your employee handbook needs a preface. The purpose of this section is to introduce the document and touch on the basics.
- Welcome. Say hello to the employee, thank them for coming aboard.
- Introduction. Briefly introduce the company and the CEO, you will get into the specifics later.
- Purpose. Explain the reasoning behind the handbook, why it exists and why it has been distributed to them today.
- Usefulness. Explain the practical use of the handbook. Let the employee know that it’s filled with relevant information that they should know now and in the future.
Looking to beef up your formal documentation process? Explore our Ultimate Directory to find downloadable, editable HR forms and templates.
- Disclaimer. Include a handbook disclaimer stating that the document itself is not a binding job contract. This will protect the company from litigation.
Note: A disclaimer is the most important part of the entire document. Make it very clear that the handbook is neither a contract nor a promise of employment. This way, terminated employees are unable to pursue legal action for a “breach of contract”.
Feel free to use this sample disclaimer in your employee handbook:
“The purpose of this employee handbook is to provide employees with general information and guidelines. It is in no way a legal contract, and employment may be terminated or resigned from at any time.”
In this section, the objective is to provide a brief overview of the organization.
It’s like an autobiography of the company: where it started, where it is currently and where it’s heading in the future. You should be able to read this section aloud and say, “yes, this is us”.
- History. Tell the story from the beginning. Introduce where the company came from and how it has evolved.
- Values. Name your values. These are the foundation upon which the rest of the company’s culture is built. Your values express your beliefs and influence your behaviors.
- Mission. Explain what the company does, who it serves and why it exists. A mission will help employees feel a sense of purpose, direction and duty.
Not sure how to tell the company story in a compelling way? Learn the ins and outs of an inspiring internal policy with 18 of the Best Code of Conduct Examples.
- Vision. Where does the company hope to go and what does the future hold? This can be vague, it doesn’t need to be an exact roadmap.
- Goals. Emphasizing specific goals shows employees how they will be contributing to the future success of the company.
- Culture. This section is becoming more common and important. Reference things like your open door policy (if you have one) or the company structure (are you hierarchical or do you live in Flatland?).
Here is sample text describing company values:
“Here at [Company Name], we value three things in particular: inclusiveness, collaboration, and communication. Thanks to these values, we have achieved the unachievable.”
In this section, the goal is to set the employee up for a smooth ride from day one. Provide the information necessary to successfully adopt their role in the company.
- Forms. Distribute insurance documents, tax paperwork, emergency contact and benefit forms that new employees must complete.
- Dress Code. Some companies (such as law firms) prefer a strict dress code whereas others legally require one (such as construction companies).
- Parking. Explain the company’s parking situation. Is there parking onsite? Offsite? Is it free? Is there a cost? Is there a waitlist?
- Identification. How does the employee prove their identity? Explain where and when to obtain a keycard used to enter the building (if applicable).
Here is sample wording to explain a company’s parking situation:
“[Company Name] offers parking in the lots located at [address] for [$] per month. If you wish to obtain a spot, send an email to [name] indicating when you would like your parking to begin and how you wish to pay.”
The purpose of this section is to inform new employees of policies in place for health, safety and emergencies, and provide existing employees with a place to refer for information.
- Safety Procedures. Outline procedures in place to deal with health and safety issues. Where is the first aid kit? The fire extinguisher?
- Emergency Procedures. Answer any questions someone might have in the event of a fire, natural disaster or violence (weapons) in the workplace.
An incident response plan can mean the difference between chaos and control. Learn the 15 Steps to Address Workplace Incidents, Accidents and Emergencies now, before it’s too late.
- Additional Information. Direct employees to a place where they can find more details. Where are safety maps posted? Is there a more detailed guide online?
- Company Vehicle. How do employees report accidents that involve a company vehicle? Explain the standard procedure for reporting collisions.
In this section, explain basic employment policies such as work hours, employment classifications and attendance policies.
- Define Classifications. List and define all applicable employment classifications (full-time, part-time, temporary, seasonal, contractor, etc.).
- Explain Overtime. Overtime policies are likely regulated by your federal or state laws, so simply copy and paste legal text.
- Work Hours. What is the typical company schedule? Do you offer flexible hours? Can staff work from home? What about emergency closings?
- Daily Breaks. Set expectations for lunch and rest breaks, including how long breaks are intended to be and when they should be taken.
- Attendance Policy. What happens if an employee strays from standard hours? What’s the best practice if you come in late or leave early? Address absenteeism.
We suggest you borrow this wording from the Department of Labor website:
“Employees covered by the Fair Labor Standards Act (FLSA) must receive overtime pay for hours worked in excess of 40 in a workweek of at least one and one-half times their regular rates of pay…”
It’s best practice to dedicate an entire section to compensation and benefits. Employees often consider these to be the most important pieces of employment information.
- Pay. Being a key part of the employee-employer relationship, new recruits will want to know about pay-grade structure, pay frequency and distribution.
- Insurance Benefits. What do you offer? Hint: common benefits include dental, vision, disability, flexible spending, life insurance and employee discounts.
- Retirement Plans. Explain what the employee can expect in terms of retirement plans, such as a 401(k) or an RRSP.
- Bonuses. What kind of bonuses or incentives should the employee be working toward? Are holiday bonuses standard? What about profit-sharing?
- Additional Perks. Some companies offer additional perks to longer-term employees. Do you set aside money in the budget for annual training or education?
- Employee Resources. State if your company offers employee assistance programs, counselling services, advisory services or other available resources.
Use this sample text to discuss additional employee benefits:
“On their one-year anniversary with [Company Name], full-time employees will receive an allowance of $1000 per year for work-related training or education. It is up to the employee’s direct supervisor to evaluate relevancy and approve or deny requests.”
The objective of this section is to define and explain all types of leave available to employees including federal and state mandated leave laws.
- Holidays. Compile a list of the public, federal, state and religious holidays observed by the company and explain how they may affect pay or work hours.
- Paid Time. Does your company offer time off? Explain how it accrues and whether or not it is paid. Describe how to request or schedule days off.
Your state may have changed or added rules about paid leave so don’t forget to update your paid leave policy. For other employee updates you might need to make this year, check out this article on Employee Handbook Updates for 2018.
- Sick Time. Does your company offer sick days? Explain how they accrue and whether or not they are paid. What is company policy regarding doctor notes?
- Personal Leave. Communicate company policy for personal leaves of absence, including whether or not they’re paid and how they’re scheduled.
- Family Leave. Reference the Family and Medical Leave Act and legal requirements for time off. State if your company offers additional maternity or paternity leave.
- Funeral Leave. Does your company offer bereavement or “funeral” leave? Is it paid or not? Is it restricted to immediate family or not?
- Other. Reference other leave honored by company policy (stress days) or by law (jury duty, voting).
In this section, communicate the company’s policies regarding performance. Proactively answer questions employees will have about performance reviews and assessment.
- Assessment. Communicate the company-wide key performance indicators of success such as diligence, attendance or knowledge.
- Review. How often will staff have performance reviews: annually, biannually, quarterly? What kind of review system should the employee expect?
- Grievance. Explain company policy for employees who wish to file a grievance specific to unfair or inaccurate performance assessments or reviews.
“At [Company Name], we believe that quarterly reviews are rarely an accurate indicator of success. For this reason, we prefer to conduct annual performance reviews.”
Here, you want to explain to employees (new and existing) the expectations regarding the use of company property. Offer specific examples of appropriate and inappropriate use.
- Appropriate Use of Telephone. State the expectations the company has for telephone (landline and mobile) use in and out of the workplace.
- Appropriate Use of Company Equipment. How is equipment (such as laptops and tablets) obtained? How should equipment be used? Where can it be used? What happens if it’s damaged? Cover security measures, such as not connecting to public wifi and not connecting devices to company computers.
- Appropriate Use of Internet. Outline the standard use of Internet in the workplace. Touch on things like banned websites, personal use and monitoring practices.
Social media is everywhere, so consider investing your time into developing an entire policy. Our Social Media Policy Checklist can help you with that.
- Appropriate Use of E-mail. Explain standards for email use in the workplace. Remember to clarify things like personal use and best practices for safety (not clicking on unknown links, encryption, etc. ).
- Appropriate Use of Company Vehicles. Communicate the basic rules for company vehicles including what to do if you get a ticket and how mileage reimbursement works.
Include something like this to prevent inappropriate use of company-issued mobile devices:
“Mobile devices issued by [Company Name] are intended to be used for business purposes only. The company reserves the right to monitor employee usage of the device and review mobile phone bills to confirm proper usage. This includes cellular phones and tablets.”
Include any conduct- or behavior-related policies that exhibit how the company expects its employees (and therefore readers of this document) to behave.
- Conduct Policies. Include all relevant policies relating to employee conduct such as: anti-harassment policy, anti-discrimination policy, anti-theft policy, drug and alcohol use policy, conflicts of interest, code of ethics, fraternization policies, etc.
Use this code of conduct template to make sure that your company’s code of conduct checks all the boxes of a successful workplace policy.
- Reporting. Explain standard company practice for reporting inappropriate conduct or behavior. Give a step-by-step guide on how to make a complaint.
The objective here is to acknowledge that the company has disciplinary procedures in place to combat misconduct (but without instilling unnecessary fear in the reader).
- Disciplinary Process. Specify what constitutes grounds for disciplinary action and the disciplinary process (step one – written warning, etc.).
Using a Termination Letter Template is the best method for writing consistent, thorough termination letters every time.
- Resignation. Explain the proper process for announcing resignation from the company which is often a written two-week notice.
- Exit Interviews. Are exit interviews the norm? When are they conducted and what is the overarching goal of one?
At the very end of the employee handbook, attach all necessary agreements or forms for the recipient to sign.
- Acknowledgement of Receipt. By signing and submitting this page, the reader confirms that it’s their responsibility to understand and follow the policies in this document.
- Other Agreements. Include other agreements you want to obtain a signature for, such as confidentiality or non-compete agreements.
One final tip: review the employee handbook with a legal professional. Since a key purpose of this document is to protect the company from litigation, you’ll want to double or triple check it’s doing just that.