Steps to writing an Employee Handbook
As a new small business owner, you may not yet have an employee handbook of all your policies, procedures, and all other employment and job-related information employees need to know and acknowledge.
There are many reasons to have an employee handbook that new hires read over and sign immediately.
- That it sets clear expectations for your employees
- States your legal obligations
- Defines their rights.
The handbook protects your business against employee lawsuits and claims, like wrongful termination, harassment, retaliation, and discrimination.
This blog will discuss steps to build your personalized employee handbook without adding too much information.
Step 1: Work Hours, Compensation, and Benefits
A fundamental expectation to set is when employees start/ come into the office and when they leave. Time tracking is also extremely important to protect the employee and your business.
There is even an obligation to that effect in California. This section should also include overtime policies, probationary period policies, and leaves of absence (sick, vacation, PTO, etc.) Be sure to research what is mandatory, both federally and state.
Although pay is covered in an employment contract, pay raises and bonuses can be outlined in the handbook if they are standardized. For example, employees may get a pay raise each year after a positive performance review. Or pay may increase with inflation. This is not mandatory but will give employees something to look forward to.
Be sure to research minimum wage and overtime laws. Also, check out exempt versus non-exempt employees and part-time versus full-time employees. Independent contractors and hourly or contract employees all have different privileges and responsibilities.
Pro tip: Read about How to Deal with Quiet Quitting Trend – Startup Tandem
Step 2: Explain your Company Culture & How Employees Stay Aligned
First, include your Code of Conduct, which “lays out the company’s principles, standards, and the moral and ethical expectations that employees and third parties are held to as they interact with the organization” (GAN Integrity, 2020).
Performance Reviews and progressive discipline keep your employees in line and A-aligned with the culture. Performance reviews are an opportunity to look not only at performance but also at how closely the company’s values and mission align with the employees.
These “hook” an employee at onboarding when the culture is strong and well-defined. Employees feel safe knowing what you’re doing, and they’ll be more likely to stay and perform well.
Pro tip: Read more about How to Make a Hybrid Model Work for your Business￼ – Startup Tandem
Step 3: Don’t forget all the legal stuff
Include equal employment and non-discrimination laws, anti-harassment laws, and workers’ compensation laws (Square, 2021).
You can find the federal ones here:
- EEOC United States Department of Labor
- Occupational Safety and Health Administration
- employer responsibilities
and state ones here: State Labor Laws. Some US states explicitly state the specific legal content you need to have in your handbook. For example, in California, the Department of Industrial Relations has instructional manuals and pocket guides to help you construct employee handbooks for various industries.
You probably want to consult a lawyer during or after writing your handbook’s legal section(s). Remember, your employees have a copy of the handbook and use it as a guide. Still, you can include a disclaimer such as, “I understand that this handbook is NOT a binding contract but provides guidelines for personnel concerning the company’s policies and benefits.” You can also state that the company “may change, rescind, or add to any policies, benefits, or practices described in the handbook at its discretion, without prior notice.” Finally, include the nature of employment, such as “at-will” in California, and have the employee acknowledge receipt by signing the last page to keep in their personnel file.
Lastly, keep your handbook up to date, even when it comes to mandatory laws and benefits. For example, in 2020, California’s Employment Development Department
Implemented a new form: DE4 (Employee Tax Withholding for your company’s records, incorporating a new law: ABC (an employment status test), and made COVID-19-related changes to a tried-and-true form: the I-9.
This is by no means an exhaustive list of what to include. A more comprehensive list is here:
- Equal employment opportunity (antidiscrimination)
- At-will nature of employment
- Code of conduct
- General employment information
- Safety and security
- Pay policies such as information on paydays, timekeeping, overtime eligibility, meal and rest periods, etc.
- Sick leave policy
- Paid vacation policy
- Family and medical leave — if a business has 50 or more employees, it often needs to have an FMLA policy
- Assessment process for promotions and raises
- Process for filing a complaint
- Welcome letter from CEO or founder
- Company’s mission statement
- Company culture
- Annual office closures
- Behavioral expectations including attendance and dress code if relevant
- Standard operating hours including rules about employees being onsite outside of these hours
- Review process and how to get a promotion/pay raise
- Progressive discipline or policy when behavior doesn’t meet expectations
- A form to sign saying they’ve read the staff handbook and agree to the terms (Square, 2021).
Pro tip: Read more about Steps to Retain Employees￼ – Startup Tandem
How Can Startup Tandem HR Help?
If you follow these simple steps, you can avoid lawsuits/claims like wrongful termination, harassment, retaliation, and discrimination. Also, you can set clear expectations with employees, which helps with trust and communication, and thus, job satisfaction and retention. Trust and communication help them perform better too! Startup Tandem provides human resources consulting services to help you write your employee handbook – or we can write it for you! We include policies to keep you compliant and away of trouble.