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    7 Crucial Elements of an Employee Handbook

    An employee handbook is a critical element of your business, but it can also be overwhelming to develop when you consider all of the information that should be included.

    Your employee handbook sets proper expectations for new hires and should be a valuable resource for existing employees to review policies and find pertinent information that they may have forgotten, such as your FMLA policy or disability benefits. In addition, some federal, state, and local laws require you to inform employees in writing about certain policies, so you should familiarize yourself with those requirements by visiting the U.S. Department of Labor (DOL).

    Whether you are starting your first employee handbook, or you are revamping your existing handbook, we’ve compiled a list of seven crucial elements to help you develop a complete handbook that will protect you legally and give your employees a thorough understanding of your company and the expectations you have for them.

    1. Organizational information

    While new employees may have a high-level understanding of your company’s organization, they probably are not well-versed in your company's mission, values, and vision for the future. Your employee handbook could include a letter from an owner or leader of your business welcoming new employees to the company and giving them deeper insight into your values, company culture, history, and business objectives. It could also include an organization chart so that new employees understand the basic hierarchy and organizational structure.

    2. Compensation and benefits

    Compensation and benefits are likely two of the major factors that impacted an employee's decision to work for you. Your employee handbook should clearly communicate your payroll structure (weekly, biweekly, monthly, etc.), break allowances, part- and full-time schedule and requirements, time off and leave policies, overtime policy, salary increases, performance reviews, and to the extent they are available, any bonus, stock option, or commission opportunities.

    This section of your handbook should also generally outline any additional benefits that you may offer to your employees, such as health, dental, vision, and life insurance, retirement plan options, and wellness programs. Be sure to include the basic eligibility requirements (do you offer benefits to both full- and part-time employees?), enrollment terms, and eligible life events.

    3. Code of conduct

    The code of conduct section of your handbook sets key expectations for your employees. Here, you can discuss your general ethical and behavior expectations so that your employees begin their employment with a clear understanding of what is and is not acceptable. In this section, you can include things such as:

    • Dress code and grooming standards

    • Substance abuse and smoking policies

    • Attendance expectations

    • Internet and/or email use policies

    • Data privacy standards

    • Data security and document management policies

    • Communication with the media policy

    You should also include compliance with any required governmental laws that may be required by your industry, such as securities laws, bribery, or conflict of interests. Because this section is so important, it should be written clearly, concisely, and without an over-abundance of legal jargon. It should also outline the consequences for noncompliance.

    4. Leave of absence policies

    Your employees will need to take time off from work at some point during the duration of their employment, and they should have a clear understanding of your leave of absence policies. This should include an outline as to how an employee earns and schedules time off, as well as a schedule of any included paid holidays. If your business stays open on holidays, you'll also need to address how employees will be compensated for this time. This section should inform employees of vacation, sick, or paid time off options. Some leave of absence policies are required by law such as FMLA, jury duty, military leave, and time off to vote, therefore, they may be required to be included in your employee handbook.

    5. Equal employment and non-discrimination policies

    As mentioned earlier, most employers are legally required to comply with, document, and inform their employees of several equal employment and non-discrimination laws. The list can vary by state and industry, so it is critical to cover all your bases. In most states, your non-discrimination policy should include verbiage that informs employees they are protected from discrimination based on age, sex, race, religion, national origin, pregnancy, sexual orientation, or disability both during the hiring process and throughout their employment with your company.

    6. Workplace safety

    Your employees should know the policies and procedures you have in place to ensure their safety while on the job. Not only is it ethical to ensure workplace safety, but it's also required by law—the Occupational Safety and Health Act (OSHA), to be exact. OSHA requires you to provide a working environment that does not have recognized hazards that cause, or could potentially cause, death or physical harm to your employees. Your employee handbook should go into detail about what you will do to prevent injury and illness, as well as what your employees are required to do, such as reporting accidents or potential safety hazards and complying with all applicable safety policies.

    To learn more about your business' requirements, visit OSHA's website by clicking here.

    7. Other applicable policies

    Depending on the nature of your business, you may need to include other miscellaneous policies that apply to your employees and/or your specific industry. This can include policies such as:

    • Company vehicle use

    • Company credit card use

    • Social media use

    • Networking and entertainment

    • Cell phone and other electronic devices

    The last thing that should be included in your handbook is an employee acknowledgment page. You will want to keep a signed copy for each employee on file. Their signature acknowledges that they have read and understood your company's policies and procedures.

    Developing a comprehensive employee handbook can be a substantial, but important task, so make sure you work with the right members of your organization who can provide proper insights and an attorney to ensure you develop a legally sound document.

    Learn how to combat the national labor shortage. Download the whitepaper!

    Norman L Paul, Jr., J.D.

    Norman L Paul, Jr., J.D. is CEO of SWBC PEO. He is responsible for overseeing the company’s professional employer services, including payroll, employee benefits and benefits administration, workers’ compensation, and HR support for more than 14,500 shared employees in Texas and 40 additional states. Norman also serves as Corporate Counsel for SWBC PEO, providing guidance on compliance issues and conducting client training.

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