Congratulations! You’ve passed the first few hurdles of starting a business, helping it grow, and hiring your first employees.

Now comes the big-picture work of fostering a great culture, setting and maintaining clear expectations, and ensuring that everyone is on the same page so that work can flow as smoothly as possible.

One of the tools that helps you do all of these things is the employee handbook: it is an essential resource for small businesses because it clearly lays out exactly what you expect of your employees—and exactly what they can expect of you.

How to Create an Employee Handbook

An employee handbook can help you:

  • Clarify your business policies
  • Establish clear work expectations
  • Inform employees of their rights and benefits
  • Simplify on-boarding of new hires
  • Signal to employees that the same rules apply to everyone equally
  • Prepare for challenging HR scenarios, like disputes between co-workers
  • Defend against potential lawsuits for sexual harassment, discrimination, wrongful termination, and more

It will take some up-front effort to plan and write a great employee handbook; but it will pay off exponentially later, when you suddenly realize how seldom you’re having to explain the same policy over and over again, field the same recurring questions, and remind employees of work policies.

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So how do you write a truly useful employee handbook? Keep reading: the tips in this article will help you plan and write an employee handbook that gives your business a professional edge and saves you time (and potential legal trouble) in the long term.

What to Include in an Employee Handbook

Before you start writing your employee handbook, you should plan out exactly what you will include. Here are a few considerations to get you started:

1. A message that sets the tone for your business culture

Before you dive right into policies and procedures, it’s nice to welcome employees and set the tone for what they can expect from your company’s culture. Some things to consider including are:

  • A welcome letter from company leaders
  • Your history and mission statement
  • Your company’s cultural values

2. HR expectations and policies

The employee handbook should clearly outline HR policies regarding things like:

  • Annual office closures and holidays
  • Established working hours and lunch break policies, if any
  • Professional dress code expectations, if any
  • Notice required for vacation, time off, and medical leave
  • Reimbursement of business travel expenses
  • Annual review policies and expectations
  • How you make decisions about employee promotions and raises
  • Procedures for filing workplace complaints
  • Disciplinary procedures for when employees don’t meet expectations

3. Employee benefits

In your employee handbook, clearly explain the benefits employees are entitled to while employed with you. For example:

  • How much paid vacation time can they expect for every year of employment?
  • Do you have a parental leave policy? Does it extend to both parents? What does it entail?
  • What about your family and medical leave policies?
  • Do you allow for flexible work-from-home arrangements?
  • Do you provide opportunities for professional development?
  • Which health and dental benefits do you offer?
  • What about retirement benefits? Do you match employee contributions?

4. Written legal policies

As your business grows, so does the risk of exposure to potential lawsuits for everything from sexual harassment to wrongful termination. Having a written policy around these topics can give you an added layer of legal protection.

Depending on where your business is located, you may even be legally required to have written policies in place. California, for example, requires employers to have policies regarding workplace harassment and internal reporting procedures.

Legal policies you may consider including in the employee handbook include:

  • Harassment and discrimination policies
  • Nondisclosure agreements
  • Noncompete agreements
  • Rules about intellectual property rights
  • Arbitration dispute procedures
  • Privacy policies
  • Safety procedures and expectations
  • At-will employment policies
  • Codes of conduct
  • Occupational Safety and Health Administration (OSHA) policies

It’s important to get these policies right: check with your lawyer to make sure you cover all your bases and comply with any legal requirements in your jurisdiction.

What to Do Once You’ve Written Your First Draft

Once you’ve outlined and written a first draft of your employee handbook, don’t just print it, publish it, and distribute it to employees. There are still a few more steps to take before it’s ready to go:

  • Have an employment lawyer review it. A sharp pair of legal eyes can spot potential problems, omissions, and ambiguities in how your policies have been written—especially regarding important topics like sexual harassment or discrimination. A good lawyer will recommend that you use very specific wording that leaves no room for misinterpretation, so that you’re protected from legal trouble later down the road.
  • Have a good editor work on it. It’s important to have a strong editor or writer polish the language in your employee handbook so that it’s clear, simple, and unambiguous. He or she can help you transform long, wordy sentences and confusing jargon into a truly useful employee handbook that everyone can easily read, reference, and understand.
  • Proofread. Never proofread something you’ve written yourself: instead, hand it over to a fresh pair of eyes. Having another person (perhaps even a professional proofreader) check your employee handbook can save you hassle in the long run. You don’t want to open the employee handbook one day and discover a glaring typo that dramatically changes the meaning of a policy—especially if you’ve already sent it out and had employees agree to its terms.
  • Include the date of publication (and dates of future updates, as you make them). As your business evolves, you’ll no doubt make changes and additions to your employee handbook. Be sure to date every version when you do so, and to save copies of old versions. This is an added measure of protection against future lawsuits, when you may be required to prove you had certain policies and rules in place at a specific point in time.

Distributing the Employee Handbook to Employees

Once your handbook is published or printed, ask your employees to read it carefully and sign a form stating that they have read, understood, and agreed to the terms and policies within.

Finally, remember: while we’re pleased to provide you with this starter guide to writing an employee handbook, it’s not a substitute for professional legal advice. We recommend consulting an employment lawyer for the final word on everything.

Good luck!

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