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The three components every employee handbook should have

Liz DeCarlo

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The three components every employee handbook should have


Section 1: Hiring and retaining talent

Section 2: Employee compensation and motivation

Section 3: Employee processes/managing employees

The three components every employee handbook should have

By Liz DeCarlo

As businesses grow from a one- or two-person office to multi-employee teams and departments, it’s often helpful to begin documenting policies into an employee handbook. From attendance and dress code policies to benefits and governmental regulations, putting all the information in one place can protect both employees and employers.

“It’s common for a start-up to not have this, but it’s a long-standing best practice for there to be policies,” said Nora Harsha, knowledge advisor for the Society for Human Resource Management in Alexandria, Virginia. “Handbooks are helpful because it’s all in one place. It basically tells the rules and expectations in the workplace.”

To start writing your own employee handbook, Harsha recommends considering the following three key components: rules of the workplace, government regulations and employee benefits. “Start with, ‘What’s important to us?’” Harsha said. For instance, some employers may feel employee attire is an important part of their brand, so they’ll include a dress code in the handbook. “Identify what is a priority for your business, and that will be part of your outline.”

This section could also include the company’s sexual harassment and social media policies. Attendance policies — for instance, if a doctor’s note is required when an employee will be on medical leave — would also be included in this section.

The second step is to understand what government laws and regulations affect your business. Harsha recommends consulting a human-resources consultant or a lawyer who specializes in employment law to understand what areas employers are obligated to notify employees about.

For instance, in the United States, companies with more than 50 employees are subject to laws on family medical leave and explaining health care coverage after an employee is terminated.

The third portion of an employee handbook should address employee benefits such as vacation and sick time, paid holidays, jury duty, payroll and direct deposit procedures. This section could also include information on company disciplinary procedures.

“You may want to outline if you have a progressive disciplinary process, for instance starting with a verbal warning, then written warning, then termination,” Harsha said. “Also outline things you have zero tolerance for — theft, sexual harassment, and altercations with clients or other employees.”

Sharing with employees
Employee handbooks don’t do much good if they’re not shared with and read by employees. “A lot of companies will provide employee handbooks as part of their onboarding process. They could have an orientation meeting with new hires to go over the handbook and see if anyone has any questions,” Harsha said. “Whether they receive it via the company intranet or in a hard copy, best practice is for the company to get written acknowledgment that the employee has received the handbook.”

It’s also crucial that supervisors receive training on the employee handbook so they’re familiar with company policies and rules, since they’re the one accountable for enforcing them, Harsha said.

Review and revise
Another best practice is to periodically review and revise the handbook. “Laws change, or something may occur with employees that triggers a change,” Harsha said. Whenever there is a change, she suggests again getting acknowledgment from employees that they have received the updated version.

Harsha emphasized the most important aspect of an employee handbook is applying the policies consistently. “Companies should not apply their policy to their problem employee and then let a good employee get away with the same infraction.

An employer needs to be able to say, ‘Yes, in every incident, we have terminated when someone has exhausted their attendance policy.’ Or ‘In every instance when someone has been terminated for sexual harassment, we’ve treated everyone the same.’ Being consistent is a very useful tool.”

SIDEBAR: Putting it on paper
Harsha recommends every employee handbook include the following:

  1. A statement that employees are at-will employees, and the handbook does not constitute an employment contract.
  2. A disclaimer that the policies in the handbook are subject to change, so someone doesn’t pull out the one they had when they were hired and say, “You can only hold me to this one, not the third or fourth that came out.” Employers have a right to change the rules.
  3. A signed acknowledgment from the employee that they have reviewed the handbook.

It’s also a good idea to have an attorney review an employee handbook prior to disseminating it to employees, she said.


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