The Importance of Employee Handbooks

Small Business owners often wonder when and whether they need an employee handbook.

In an ideal world, you would publish your handbook upon hiring your first employee.  Realistically, this just doesn’t happen.  So, when should you bring out the employee handbook?  Though there is not a defined guideline, as soon as you have a few employees and at least by the time you have 10, you should create and distribute an employee handbook.  (Note, some regulated industries do require employee handbooks, so you may need one sooner.)

An employee handbook sets expectations for the employer and the employee.  The handbook defines the standards for treating employees fairly and consistently without discrimination.  The handbook establishes  standards of behavior, complements the company’s culture, and creates a uniform working environment across departments.

Elements of a Great Employee Handbook

An employee handbook sets expectations for the employer and the employee.  The handbook defines the standards for treating employees fairly and consistently without discrimination.  The handbook establishes  standards of behavior, complements the company’s culture, and creates a uniform working environment across departments.

  • Drafting. Consult an attorney with knowledge of employment law and employee handbooks.  If your business is in a heavily regulated industry, seek an attorney with experience in that industry.
  • Customize it.  Though it is tempting to buy a canned employee handbook or borrow one from a colleague, handbooks are as individual as each company’s culture.  Though the basic federal and state law regulations remain the same, your standards of conduct, employee benefits, and internal procedures will be quite different from your competitor.
  • Clear Language. Write clear, easily understandable policies.  Avoid legal jargon.  Every employee from the least specialized position to the executive level should be able to understand the policy.
  • Legal Compliance.  Confirm your policies comply with state and federal law, particularly those pertaining to the notable employment laws, such as FMLA, Americans With Disabilities Act, wage/hour laws, OSHA compliance, etc.
  • Distribute it.  Distribute the handbook.  Although obvious, too often clients begin the process of creating a handbook but do not follow through to completion and distribution because other priorities superseded the handbook.
  • Acknowledge Receipt.  Require your employees acknowledge, in writing, they received a handbook, read it, understood it, and had an opportunity to ask questions.  Some employees may lie and not actually read it, but by signing the acknowledgement, they now are responsible for acting in accordance with the handbook.
  • Enforce Your Policies. Hold all employees and managers to the handbook.  Allowing exceptions leads to resentment, low-morale, and even legal claims of disparate or discriminatory treatment.
  • Review and Update.  Regularly review and update your handbook.  An outdated policy can be worse than no policy.  In addition, the more outdated policies in your handbook, the more likely your employees will ignore the handbook entirely.

If you do not already have an employee handbook, I strongly urge you to consider one.  If you do have one, review it, update it, and audit your company to see if it is being uniformly observed.

About Christine Jarzab Kuntz

Cynthia Gonzalez PA Employment Law
Learn More