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Congratulations on even having an Employee Handbook! Many small businesses try to go without, which ends up being a mistake. A current and labor law compliant Employee Handbook is an asset. It welcomes new employees, answers commonly asked questions and establishes standards for consistency and accountability; it proves what the employee should. Handbook should be disclosed to others, except Company Name employees and others affiliated with Company Name whose knowledge of the information is required in the normal course of business. Some subjects described in this handbook are covered in detail in official policy documents. Sterling (Built with AirMason) Sterling had a lot of information to get across in their handbook, so.
While you might be focused on tasks that are driving your top-line, you need to carve out time to formally document procedures and policies to help keep your employees informed. It is essential that your employees know and understand these policies because it can help solidify the success of your small business. Without the guidance and structure that an employee handbook can provide, your team could unknowingly be breaking rules or causing confusing in the office, which could lead to employee turnover
At a high level your employee handbook will:
- Detail important office protocols
- Establish a positive work environment
- Define your unique company culture
Keep reading to learn tips on how to write a small business employee handbook, what to include, and ways you can benefit.
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How to Write a Small Business Employee Handbook Step by Step
Your new hire is through the door and eager to get started. During their orientation, you should devote ample time for the new team member to read through their employee handbook. It is an essential first step to proper onboarding. You can make their reading experience easy and effortless by writing a small business employee handbook in a clear, logical structure.
Your employee handbook should be well-organized and broken into distinct sections:
- Introduction, Welcome Letter, and Mission Statement
Consider the introduction as your first impression. In this section, you’ll want to amplify your excitement for your new hire and trumpet your enthusiasm about the company. Aim to place inspiring language that pumps them up to learn about their new job—without sounding artificial or tacky. They likely have a heavy reading load, so keep the tone fun yet professional.
The introduction is a perfect time to include your company’s mission statement. The mission statement should define your core values and inform your new employee about important aspects of the company. If you haven’t written your company mission statement, then devote time to articulate the company’s focus and values so that you have a clear and concise ethos that everyone can get behind (which will help you attract customers just as much as employees!).
- Legal Notices
There are many legal notices you’ll want to include in your small business employee handbook.
You can state these at the beginning and get them out of the way or save them for the end; either way, be sure to touch on these two policies at a minimum, as enforced by the U.S. Equal Employment Opportunity Commission (EEOC). You should consult your own attorney on what legal notices should be included in the handbook.
- Employment policies
This section of your small business employee handbook breaks down various terms of employment, such as paid time off, sick leave, overtime eligibility, and so forth. If there’s a difference in these structures based on employee tenure, be sure to include that information as well.
Here are some examples of what you’ll find in the typical employee handbook:
- Hours of work
- Behavior expectations
- Dress code
- Remote work policies
- Attendance and punctuality
- Proper Internet usage
- Social media policy
- Company equipment
- Process for filing complaints
- Personnel records
- Email policy
- Telephones
- Substance policy
- Smoking policy
- Alcohol policy
- Safety rules
- Review processes
- Progressive discipline policies
- Compensation
- Payroll practices
- Salary deductions and withholding
- Direct deposit rules
This list is by no means exhaustive but gives you a great starting point to consider.
- Company benefits
Does your small business offer employee benefits? Here’s the place to showcase them. Mention the benefits that the new employee can expect to enjoy, such as employer contribution matching, short-term disability policies, long-term disability policies, life insurance options, and more. If you provide medical, dental, and vision insurance, relay all of the relevant provider information in this section.
Make a note of any retirement plan you might offer, the open enrollment period, and your employer contribution policy (if applicable). Be sure to tell your new employee where to go if they need more information on their benefits packages.
It’s also important to mention vacation and holiday policies and other types of leave, including bereavement and sick leave.
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- Disclaimers
Finally, include any necessary disclaimers, such as the process for filing a complaint. Describe the reporting system and make it known that anyone who submits a report will be kept confidential to whatever extent possible. Also let your staff know that any report or complaint will receive a prompt, thorough, and impartial investigation.
Hitting these five steps are essential for learning how to write a small business employee handbook. That said, there’s supplemental information you could (and should!) consider including, such as:
- Ideal work environment
- Employee review procedures
- Promotion and pay raise guidance
- Annual office closures
Your handbook should be exhaustive—but not exhausting. As you’re sure to include all the essentials, be careful not to be overly-detailed or too informative. Keep it light, but concise so that the new hire can quickly read through the material and absorb the information. If your new hire merely glosses over important information, then they could inadvertently skip some key points. According to research from GuideSpark, 43% of workers in Generation Y are not reading the majority of the employee handbook and 33% of non-Generation Y are also not fully reading the handbook. What’s worse, 11% of Generation Y have not actually opened it while 36% of non-Generation Y have no idea where their book is.
As you can see, it’s vital that your handbook is simple yet well-written. This helps ensure you aren’t bombarding your employee with too much information, causing them to close the book for good.
Pro-tip: You might consider sitting down with the new employee during their first week and highlighting areas of the handbook that you believe are of particular importance.
Mistakes to Avoid when Writing a Small Business Employee Handbook
As you begin writing an employee handbook for your small business, be careful to avoid these common mistakes:
- Manual is not user-friendly
It’s important to stress the need for an approachable employee handbook. As we mentioned, be sure it’s well-organized and follows a logical structure—avoid placing in out-of-sync information. Also, steer clear of jargon and heavy usage of technical terms which could affect comprehension. If it’s not easy to read, then chances are it won’t be understood.
- Disclosures are omitted
Be sure to include all of the necessary legal disclaimers when structuring your small business employee handbook.
- Legal review is excluded
On that note, it’s critical to get legal consultation after you learn how to write a small business employee handbook. Failure to include certain information might land you in some legal trouble. An attorney experienced in employment matters needs to review your employee handbook to make sure it reflects the current employment laws, paying special attention to anything that could potentially be read as discriminatory.
The Importance of Learning How to Write an Employee Handbook for a Small Business
So why go through the trouble of writing a small business employee handbook? Let’s take a look:
- Announces workplace rights
These laws can vary state by state, so be sure to check with your local jurisdiction. The Department of Labor and Industry in Minnesota, for example, could be very different from the laws imposed by the Texas Workforce Commission. Your legal team should be familiar with the legislation that applies to your particular area, which makes their role all the more important.
- Outlines work performance
Having documentation in your handbook about many aspects related to the workplace can help guide tough decisions that might be extra hard as a small business owner.
When your team is compact, the relationship between boss and employee can be easily blurred. If someone you’re close to and respect begins to slip up at work, coming in late or performing poorly, it could be challenging to reprimand them and correct the problem. Having clearly stated policies and procedures can help to alleviate awkwardness and potentially hurt feelings by objectively laying it all out there.
Benefits of a Well-Written Employee Handbook
An effective small business employee handbook may not only help to clarify policies like the vacation request process, social media usage, and meal break periods, but it could also provide a slew of more advanced benefits.
Sets expectations: To help keep harmony in the workplace it’s important to set employee expectations and to encourage those expectations equally amongst the team. For example, if you expect your employees to begin the workday at 8 AM and end at 5 PM, but one of your employees consistently shows up at 9 AM and leaves at 3 PM without consequence, this may stir up fury amongst other employees.
Aside from equal treatment in the workplace, well-written expectations could also help to mitigate confusion. Because your expectations and policies are written in the same place and are accessible to everyone, the information may be easier for employees to retrieve at any time and receive the same answer.
Helps employees understand the work dynamic: While everyone needs a little reminder from time to time, it’s important that your employees understand their responsibilities and how their work contributes to the overall business goal. This is especially important for your new hires, as there may be confusion or unfamiliarity with what the definition of company success is. By thoroughly outlining your mission statement, you may be able to strategically stray from potential confusion which could result in a lack of employee performance.
Explains benefits: It’s important that your employees are aware of the benefits that they have and how they can easily get access to them. Letting employees know who their health insurance provider is, where they can find their 401K information, and how to use their vacation time may seem like an overly-simple task, but in the grand scheme of things, it may be worth the effort. According to Thomson’s Online Benefits, 81% of employees who can easily access their benefits said they feel loyal to their employer and 79% say they were proud to work for their organization.
Invites open communication and transparency: Staying true to your mission, purpose, and core values can go a long way in terms of company success. By providing employees with documentation that states the objectives of your company, you’re setting both your business and employees up for success, which could help to mitigate employee turnover and help you keep good employees.
Conclusion
There are many offerings an employee handbook can bring to a small business. From highlighting employee perks and benefits to explaining policies and expectations, an employee handbook is no doubt an essential aspect of your small business’s triumph.
Again, consider the everyday tasks that you are responsible for and the time the tasks consume. As a small business owner, you have minimal time to answer questions that most wouldn’t consider to be “top priority”. If you can create an employee handbook that quickly and thoughtfully answers your employee’s questions as they arise, then you will most likely save time for everyone.
If you need a bit more help when you sit down to create your small business employee handbook, then use these resources to streamline the process.
- Society for Human Resource Management offers a great employee handbook template
- Read about the federal laws that impact workplace issues at The U.S. Department of Labor
- Use the Department of Labor's Occupational Safety and Health Administration's handbook for small businesses
- This free model handbook from com
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Your business can enhance communication with its employees, help ensure compliance with the law, and possibly even avoid legal problems, by creating an employee handbook.
by Edward A. Haman, Esq.
updated September 24, 2020 · 4min read
An employee handbook can be a useful tool to let employees know the benefits of working for your company and what is expected of them, as well as protecting your business from lawsuits and other claims relating to employees.
Purpose of an Employee Handbook
The more people a business employs, the more challenges there are in communicating with its employees. A well-written employee handbook can help with this communication by ensuring that necessary comprehensive information is given to all employees in a consistent manner.
An employee handbook can outline employee benefits, let workers know what is expected of them, and facilitate better communication with managers. It also demonstrates the company's desire for good relations with its employees, and provides a source for employees to quickly get answers if questions arise.
Employers and the Law
One important part of running a business with employees is being aware of laws that relate to being an employer. For example, you will need to comply with laws regarding such things as tax withholding, workers compensation, unemployment compensation, minimum wage, overtime pay, nondiscrimination, sexual harassment, and accommodating employees with disabilities. State or federal law also may require that employees be given leave for such things as jury duty, court appearances, voting, and military service.
There are numerous federal and state laws that may affect the employer-employee relationship. Their applicability to your company may depend upon such factors as the nature of your business activities, and the number of employees you have. For example, the federal Family and Medical Leave Act (FMLA) applies to companies with at least 50 employees.
Such laws may require that legal notices be placed in conspicuous places in the workplace, in which case it is not necessary to duplicate the information in the employee handbook. However, you may wish to do so in order to provide your employees with a single place to look for all necessary employment information.
Employee Contracts
In addition to an employee handbook, you also may want to enter into a formal employee agreement with some, or all, of your employees. This may be necessary if you wish to have the employee legally bound to confidentiality, nondisclosure, noncompete, and ownership of intellectual property requirements.
Some companies use a single, comprehensive employee agreement. Other business may use separate employment, confidentiality, nondisclosure, and noncompete agreements.
Contents of an Employee Handbook
Employee handbooks vary in length, design, and detail. However, essentials for an employee handbook include statements that:
- The employee handbook does not constitute an employment contract.
- Employment is 'at-will,' and that either the employer or the employee may terminate the employment at any time, with or without notice or reason.
- Your company is an equal opportunity employer, and has a policy against unlawful discrimination and harassment in the workplace.
- The terms of any employment contract or specific benefit plan document will control in the event of any discrepancy with the handbook.
- Changes may be made to the handbook at any time, with or without notice to the employee.
Other subjects commonly covered in employee handbooks include:
- A general statement of the company's mission, values, and philosophy
- Company work hours, days of operation, and paid holidays
- Policies and procedures for evaluating employee work performance, such as annual performance reviews and improvement plans
- Policies regarding vacation time, as well as leave—with or without pay—for such things as illness, bereavement, and other personal time
- Permissible and impermissible use of company property
- Confidentiality requirements
- Policies regarding employment outside of the company
- Grievance policies and procedures
- Dress code
- Prohibition of alcohol or drug use in the workplace
- Social media use and content guidelines
- Notices about special legal and ethical concerns related to government regulation of your business
- Disciplinary policies and procedures, which may include what specific actions may be taken for specific policy violations and for repeated violations
- A list of employee benefits, although benefit details are usually set out in the particular benefit plan documents
Any of these, or other, subjects can be covered comprehensively in the handbook, or can be summarized in the handbook and covered in more detail in a separate document. For example, the handbook may simply indicate that the employee will have an annual performance review, with the criteria and procedures for review being contained in the particular employee's employment contract or in some other document.
It is also standard practice to have the employee sign an employee handbook acknowledgement form at the time a copy of the handbook is given to the employee. This will prevent the employee from later claiming they were not aware of the handbook, in the event disciplinary action becomes necessary.
Disadvantages of an Employee Handbook
There is always the risk that a court may determine that the employee handbook is binding, and penalize the company for not following the policies and procedures outlined in the handbook.
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For example, a court might decide that you were wrong to fire an employee if the handbook says that a written warming is the result of a first-time violation. Especially if a detailed and progressive employee discipline policy is to be described, it would be wise to have an attorney review your handbook.
Creating, and periodically modifying, an employee handbook can be a time-consuming process. Such time and effort may not be practical for a small company with only a few employees. However, creating an employee handbook can be an important part of your company's plan to hire and retain good employees. Even if you only have a few employees now, a basic employee handbook can be created, and then expanded as your workforce grows.