Employee Handbooks – Does My Small Business Need One?

An employee handbook is a valuable Human Resources tool that Orchard HR recommends every business have once they hire two or more employees. 

While not legally required, employee handbooks set expectations for employees – outlining key policies and procedures – which helps reduce liability for employers by ensuring that small businesses are in compliance with federal, state and local laws. In short, they are an important part of an HR toolkit, gathering a business’ policies in one place.

PROTIP: In our line of work, we’ve found that providing clear communication and transparency around company procedures and standards promotes a positive and safe workplace. 

What Should Be Included in an Employee Handbook?

To create an effective handbook, consider including these critical policies:

1. Company’s Mission or Values: These are the goals and philosophies that define why your business does what it does and for whom, and which values are important to leadership in how the business is run.
2. Code of Conduct: This policy supports a positive and productive work environment by setting clear expectations for employee behavior. It also helps to protect the business by outlining what is acceptable and unacceptable in the workplace. Here are few policies we suggest: 
   • Harassment and Discrimination
   • Confidentiality and Data Protection
   • Attendance and Paid Time Off
   • Dress codes and appearance 
   • Social Media Use 
3. Employment Classification: How the business defines different employment statuses: Full-Time, Part-time, Seasonal, etc.
4. Compensation and Benefits: How and when the business makes pay adjustments, what benefits and perks it provides employees, and when benefits become effective.
5. Disciplinary Procedures & Termination: How the company addresses poor performance or policy violations, and when these issues could lead to termination.

What Should Not Be Included in an Employee Handbook? 

Orchard HR does not recommend including complicated legal jargon, minor company procedures that change frequently, detailed health and welfare benefits information, or any policies that could infringe on the National Labor Relations Act (NLRA) by limiting employee activity. It’s also crucial to avoid discriminatory policies and any provisions that infringe on an employee’s rights. 

How Often Should I Update My Employee Handbook?

We recommend reviewing and updating employee handbooks annually. However, interim updates may be required when a business implements a new policy or if new legal requirements take effect. 

Again, a thorough and comprehensive employee handbook keeps everyone on the same page – from their first day to many years down the road.

How and When Should a Company Handbook Be Distributed?

It’s always a good Human Resources practice to share a copy during new employee onboarding. This sets new hires up for success from day one. Handbooks should be distributed again whenever there are updates. If employees all have access to computers in their work, then emailing an electronic copy or sharing it to an internal portal or drive is sufficient. Employees without regular computer or email access should be provided with a printed copy. In all cases, we recommend obtaining a signed employee acknowledgement of receipt. 

What Happens If Outlined Policies Aren’t Followed?

While an employee handbook should set clear guidelines, things happen. Be sure to include disciplinary procedures and consistently enforce handbook policies to mitigate reoccurrences.

This is just an overview of  what an employee handbook can include. Each one should be tailored to the needs and size of the organization.  At the end of the day, it’s a Human Resources tool that provides clarity around employment policies, workplace procedures, and employee benefits. It also delivers clear, consistent expectations to employees that in turn create a positive and productive workplace.

Employee handbooks are one of Orchard HR’s favorite projects to oversee for clients. We take a tailored approach to the handbooks we create for each small business and business owner we support. We can help you build your first handbook. We also review existing handbooks, updating policies or suggesting additions or revisions that will keep your employees updated and your business in compliance with state- or industry-specific requirements. 

Reach out today to find out how Orchard HR can help create an employee handbook that’s just right for you and your business.