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The Importance of Creating an Employee Handbook

01/16/2019  |  By: Rebekah Harney, Partner/Business Development Director, LBMC Employment Partners, LLC


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Just as companies come in all shapes and sizes today, employees themselves can embody a variety of personalities and work ethics. While some employees will be naturally inclined to know company policies and procedures by heart, others won’t pay as much attention until a situation or scenario comes up that demands a policy explanation or understanding. That’s why an employee handbook is a must for every employer.

An employee handbook clearly states a company’s legal obligations as an employer, while outlining an employee’s rights. It also provides an overall view of what to expect of a company’s culture.

If you're an employer, putting together a comprehensive employee handbook should be a priority. It doesn't have to be leather-bound and full of colorful illustrations, but it should cover all your bases.

Developing and producing a proper list of company policies and procedures

  1. Employer Expectations - While some employer expectations can be obvious, there will always be scenarios in which extra clarity and explanation are needed. Having a standard list of clear expectations in print for employees to view at any point will prevent potential confusion while giving employees a direct source of information for office basics. Work hours, dress code, use of office machinery, drug and alcohol policy, lunch hours, and break room rules should all be spelled out clearly.
  2. Employee Expectations - An employee handbook provides a peek at the best practices associated with leadership and management, as well as employer-employee relationships. Employees will also have a source of knowledge about legal regulations regarding timekeeping, payroll, benefits, and various requirements for federal and state leaves, such as the Family and Medical Leave Act (FMLA).
  3. Employee Support - Whether it be internal management or external third parties, employees should know who to contact when a situation arises that involves reporting work-related grievances without retaliation from management. If their complaints are registered and they feel like they have recourse with work-related issues, it creates a much less tense work environment. Providing this information can be a win-win for employers.
  4. Employee Benefits - From insurance to retirement to vacations, employee benefits policies can sometimes seem like learning a foreign language. With an employee handbook, benefits information can be clearly defined and accessible for employees to view whenever a question arises. The employee handbook is not the place to include every detail about health insurance, 401(k) contributions and other benefits as you will have separate materials for that. You should cover some of the basic provisions here though.
  5. Employer Values - In today’s constantly evolving culture, it’s important for employers to make employees aware of company stances on issues such as discrimination, harassment, equality, and more. It’s also important to provide a central source of information about how to report any violations regarding such issues.

Not only are these tips essential for the development and production of an employee handbook, but it’s also important to remember that an employee handbook should be updated annually. If you find it is not, be sure to reflect any policy changes and redistribute to your employees. This is a good practice to refresh your memory and ensure you're following your own policies.

Crafting an Exceptional Employee Handbook

If you're handling this in-house, note that there are some components of an employee handbook that are required by either state or federal law. Be sure to check with your state legislature to ensure that you are following all required policies. Have an employment lawyer review your handbook to make sure you're in compliance with state and federal laws.

It is also a good standard of practice with employee handbooks to make sure the language is clear and consistent.

There are a seemingly limitless number of policies that could be included in your employee handbook, there are a few that are particularly useful to outline. These policies typically include:

  • Harassment (both sexual and other) and workplace violence - Make it clear early and often that sexual harassment will not be tolerated. List the punishments and fines for violators of the policy, and make it known that all complaints will be investigated. It's critical that you make sure employees know the proper channels for reporting sexual harassment and do not feel intimidated to use them. 
  • Discrimination - Similarly, your handbook must state that discrimination based on nationality, race, color, disability, sex, age or religion is unacceptable. It is also a good idea to incorporate policies concerning protected groups of people (like those who are disabled or indigenous) to avoid any legal ramifications. It should also include the proper procedure for reporting incidents of discrimination, and mention that retaliation is prohibited as well. This section is another good place to print laws by the U.S. Equal Employment Opportunity Commission (EEOC).
  • Compensation - Include how the company handles pay periods, how to fill out time sheets, and any other pertinent payment information. Also, include an overtime policy.
  • Vacation and medical leave - Address office work policies for vacation days, sick days, jury duty, funeral leave, discretionary leave and parental leave. Make sure you're in compliance with state and federal laws (generally a good guideline when it comes to any policy you record in the handbook). This is especially important when dealing with leave that pertains to workers' compensation or ADA issues. If you want, you can use the handbook as a place to print relevant employment-related laws.
  • Social Media Policy - Employers need to be extra careful when drafting restrictive social media policies for their companies. It's illegal to ban employees from talking about the company or co-workers on their personal pages. Some states have instituted laws limiting an employer’s ability to access employee’s social media accounts. 
  • Progressive Discipline Policy - Though you should certainly list disciplinary policy regarding certain behaviors, give yourself a little leeway as well. Put in writing that you reserve the right to punish behaviors that detract from work that aren't listed in the handbook. You can't cover every potential problematic situation that might arise.
  • Additional policies to consider including - Privacy Policy, Computer/Internet Policy, Termination Notice Policy, Work Impairment Policy and Conflict of Interest Policy

With these types of policies clearly set forth in your handbook, it will be much easier for you to answer inevitable employee questions with consistency.

Communicating Your Employee Handbook

Having an employee handbook will do you no good if your employees do not read it. Unfortunately, you cannot hold an employee accountable for a policy they are not aware of, but you can hold an employee accountable for having read the employee handbook, in which all of your policies are contained.

One way to do this is by requiring all new employees to acknowledge in writing that they have read and understood the employee handbook, cover to cover. Another, possibly more beneficial idea is to make a game out of knowing the employee handbook. Run a contest for several weeks where the first employee to email back the specific page number of the policy gets a reward. Incentivizing reading the employee handbook will be your best bet in ensuring that your employees have read it. 

Mistakes to Avoid in Your Employee Handbook

The most prevalent issue when writing employee handbooks is not being in compliance with federal or state legislation, and that can cost you time and money when dealing with the consequences of such an oversight.

It is advisable to include a disclaimer at the beginning of the manual that states that regardless of what is contained in the handbook, all cases of relevant legislation prevail. The handbook is not a legally binding document, and it does not supersede state and federal employment laws. This could prevent unwanted litigation.

Some common mistakes include the following:

  • When policies are unclear as to whom they apply (overtime policies frequently fall into this category)
  • Conflicting versions of policies
  • Different interpretations of policies 
  • Overly detailed discipline procedure
  • Not specifying guidelines concerning meals, rest periods, and overtime
  • Policies concerning improper deductions and reimbursements
  • Putting restraints on the amount of time taken for medical leave
  • Utilizing “Use it or Lose it” vacation policies
  • Too rigid of a harassment policy 

Creating an employee handbook is quite an undertaking, but if done right, it can be incredibly beneficial to you and your business.

If you do not know where to start, or would like some assistance, LBMC Employment Partners, LLC, develops employee handbooks for our human resources' service clients. Handing over this important project to a professional is the best way to take out the guesswork.

LBMC Employment Partners, LLC, has all the resources and expertise that you need to create the perfect employee handbook. Learn more about our human resources services.