The Ultimate Guide to Employee Handbooks

Is your employee handbook collecting digital dust in your company’s shared drive? It’s no wonder why — most of them are dry and drab, and employees only allege to have read.

But what if there’s another way? What if your employee handbook could be a living document that amplifies company culture and workplace connection?

In this ultimate guide to employee handbooks, we’re sharing our best tips for writing a handbook that not only addresses mandatory legal topics, but also is a representation of your brand and builds mutual understanding between leadership and employees.

What is an Employee Handbook?

Employee handbooks are documents that state the policies, principles, guidelines, and expectations employees and their companies share. Also called employee manuals, staff handbooks, and employee guides, there are several interchangeable terms for these critical resources.

Your employee handbook should cover topics that help employees have positive day-to-day working experiences — such as details on your dress code, vacation time, and mission statement — as well as those that help them understand their (and your company’s) legal obligations, like state laws, federal laws, health insurance, and equal employment opportunity, among others.

Not only are employee handbooks essential for current employees to use as a point of reference, but they’re crucial to support new employees’ learning and operating within your company.

Are Employee Handbooks Required by Law?

Considering the legal nature of many topics employee handbooks address, such as employee and employer rights concerning the Medical Leave Act, or your company’s anti-harassment policy, you might wonder: Are employee handbooks required by law?

Perhaps surprisingly, the answer is no. However, your company must follow various U.S. and state laws, and your employee handbook is essential to communicating your adherence to those laws and what employees need to know and do accordingly.

Why is An Employee Handbook Important?

Each employee your company hires brings unique experiences, perspectives, and education to their role and your organization. Your employee handbook limits potential assumptions, misinterpretations, or false ideas about how your business operates and how your employees should go about their work.

In short, it’s a single and comprehensive resource that leadership and employees alike can reference as a final authority.

Employee handbooks also help communicate complex state and federal benefits programs, which can be vital for recruitment and retention. While most companies have benefits briefs for new hires, it’s a lot to digest in a PowerPoint presentation. Maintaining an updated source of this information in your handbook gives employees the freedom to reference it at their own leisure and pace.

Beyond these practical needs, a thoughtfully developed employee handbook shows new hires that you prioritize them. And detailed employee handbooks demonstrate that company leadership values clear communication, employee experience, and having an empowered staff.

What Should Be Included in An Employee Handbook?

An employee handbook should reflect a company's unique culture and brand, setting the tone for who they are and showcasing personality. Just as important is the communication of legal and behavioral policies.

Remember, you’re not legally obligated to provide an employee handbook, but it’s a best practice and can help you avoid conflict, misunderstandings, and even legal action.

Here are the key areas your employee handbook should cover.

Company Overview

This supports an important purpose for your employee handbook: to help employees understand your company’s mission and values. With this information, employees will learn the guiding principles behind your organization and grasp the underlying motives behind how business is done at your company.

Local, State, and Federal Employment Law

The laws surrounding workplace issues and employment should be your top priority when planning what to include in your employee handbook. It’s important to confirm which policies you are required to inform your employees of, and you can do so through sources such as your state labor department, your legal counsel, and the U.S. Department of Labor.

The following are examples of policies related to legal requirements, which are often included in employee handbooks:

• Worker’s compensation
• Crime victim leave
• Non-discrimination
• Military leave
• Equal employment
• Breastfeeding accommodations
• Accommodation of disabilities
• Family and Medical leave

Benefits

The employee handbook is an excellent location to house high-level information regarding your company’s employee benefits. While there are better places to detail specific plans with your chosen providers, it is an ideal location to review eligibility, enrollment dates, and which life events allow employees to change their benefits.

Employee Conduct

While employee behavior standards and expectations will vary among organizations, your employee handbook should address your company’s specific guidelines for employees. Topics ranging from standards of performance and workplace conduct to grievance issues and disciplinary procedures fall into this section.

The employee conduct section is an excellent place to present the company’s priority policies concerning behavior, such as attendance, substance abuse, and employee harassment and discrimination.

While this section’s content will vary depending on the company—for example, not all companies have a dress code they enforce—it’s essential to document the policies your organization does have for employee behavior.

Paid Leave

Your company’s vacation policy is valuable information employees will look to your employee handbook for. In this section, you can detail the vacation time policy and how employees should request and use their paid time off.

Also within this section falls information on observed holidays, as well as how employees can pursue taking various leave types (sick, military spouse, parental, etc.)

Compensation

Employees want to know how and when they will be paid for their work. Including a compensation or payment section in your handbook provides them with clearly communicated practices for when payments are made and how employees receive them. You might also outline the different pay grade structures within your organization.

Tips for Writing an Employee Handbook

Whether you are drafting the first iteration of your organization’s employee handbook or auditing your employee handbook’s content for a timely refresh, there are several guidelines to be mindful of.

1. Prioritize Your Policies

Your employee handbook should encompass all of your company’s policies and procedures. If standard practices have not been formalized yet, ensure this is done beforehand.

2. Create Policy and Procedure Summaries

For every policy and procedure your handbook includes, you should prepare an easy-to-understand summary drafted with your employee audience in mind. Ensure it does not contain complicated language and simply presents the policy or procedure’s concepts.

3. Have the Employee Handbook Reviewed

Before publishing or sharing the employee handbook with your employees, you must share it with appropriate executives, HR representatives (or the HR team), and your organization’s legal counsel.

This critical step 1) ensures that the language and content provided in the employee handbook do not create contractual agreements or open the door to legal conflicts or claims, and 2) confirms that all parties are involved with the development.

4. Consider Distribution

While print copies of employee handbooks still exist, it’s necessary to prepare your employee handbook with easy and electronic distribution in mind. The employee handbook should be made available to new hires in a quick and accessible format, and it should be equally simple for current employees to access it when needed.

This is especially important when you make policy updates and want to ensure they’re seen and acknowledged. Document management software simplifies storage and distribution of key documents like your employee handbook.

How to Use an Employee Handbook

Once your organization has a complete employee handbook ready for use and distribution, you and your employees might wonder when this new resource can and should be used. The following are examples of situations in which your employee handbook can be especially valuable.

When Welcoming New Hires

Providing your handbook to new employees should be a priority step in your onboarding process. Many companies will share the handbook and request new hires to sign and state they received and read the handbook. This helps to ensure they review and acknowledge the information shared in the handbook.

Equipping new hires with the employee handbook immediately upon their start ensures they begin their employment with access to all of the necessary policies and information that support a successful working experience for them and the company.

When Policies Are in Question

One of the best ways to ensure that all employees are operating under the same policies and procedures is to review the employee handbook when questions arise. If, for example, there is confusion or debate over an aspect of the company’s dress code, the employee handbook can serve as a definitive resource on what has been decided as best practice within your organization.

To Streamline Information Requests

For employees (especially new hires), navigating what departments or individuals oversee various aspects of their employment and time spent with your company can be confusing. The employee handbook can provide fast and accurate answers, information, and guidance for frequently asked questions and concerns.

Help New Employees Have Fun While Onboarding

Don’t hesitate to explore ways to encourage new employees to engage with and explore their employee handbooks during onboarding. One fun way to do so could be setting up an onboarding scavenger hunt, where new hires must locate important facts or information in the employee handbook.

How Often Should You Update The Employee Handbook?

There is no definitive timeline for planning updates or revisions to your employee handbook. However, as your organization grows and changes, and the world does as well. Ensure the employee handbook accurately reflects your current business’ priorities, policies, procedures, and activities.

Consider implementing a routine review of the handbook for potential updates - this could be every year, or twice a year. When you decide to add, remove, or revise the information in your employee handbook, be sure to communicate those updates to your employees and provide all with updated and current copies.

Get Started With Your Employee Handbook

Employee handbooks are extremely valuable and useful resources for present and future employees at your company. Whether you’re in the beginning stages of creating your employee handbook, or preparing to update it, now is the time to make sure it has all of the necessary components to support and protect your company and your employees.

Need Help Writing Your Company Handbook?

Through Paylocity’s HR consulting services, your company can access a custom handbook developed with your unique company culture in mind. Plus, we partner with you to minimize risk, enhance your brand, show you how to retain employees, and more. Request a demo today to learn more!