When a new employee begins the first day on the job at your small business, certain expectations are immediemployee handbookately set. While the character and culture of your office come to fruition as this new employee settles into his new role, general guidelines should be highlighted in one neat and tidy guide: the employee handbook.

As a business owner or HR manager handling approximately 5,489 tasks to keep the small business operating smoothly, one might wonder if it’s worth the investment to create an employee handbook.

While there is no law that requires your company to distribute a handbook, it is one of the most crucial internal pieces of communication you can provide your employees. The handbook outlines expectations, policies, benefits and legal regulations that can save you from a headache later down the road.

Keep in mind that it’s not an instruction book, but more of a framework for your company to follow. This framework, molded into an employee handbook, doesn’t have to be printed out with a fancy hardback cover…you can easily keep your handbook online. This is a great option if a tight budget is a top concern.

The following list of items from HR360 make up the key components of a compliant employee handbook:

(If you already have a handbook put together for your new employees, it’s a good idea to review it periodically to ensure all of your latest policies are the most up-to-date.)

Items to Include:

Welcome and Introduction to Your Company

This section is the best place to set the tone that depicts your company’s work environment. First impressions stick like glue-make sure your mission statement and culture sticks here too.

General Employment Information

Falling under this category would be an overview of business and employment policies such as job classifications, employee records and termination and resignation procedures.

Anti-Discrimination Policies

Your employee handbook should include a statement that explains how you comply with equal employment opportunity laws and related legal requirements. This is also a great place to set expectations for your sexual harassment policy and affirmative action policies.


In this part of the handbook, you should outline your company’s policies when it comes to overtime pay, payroll periods, performance reviews, break times, and bonuses. Also included here should be an explanation of how your company will make the necessary state and federal tax deductions.

Work Schedules

Attendance guidelines, absence reporting, flexible schedule policies, and work hours should all be outlined in this area of the employee handbook.

Standards of Conduct

From dress codes to ethics to disciplinary procedures, your standards should clearly be documented in this section of the handbook. You can also remind employees of any legal obligations they may need to comply with (like handling clients’ confidential payroll data).

Safety and Security

Safety and security is of utmost importance for your employees. In order to solidify this as a priority, your policies, including compliance with the Occupational Safety and Health Administration’s (OSHA) laws should be spelled out in this section. This is also a good place to include your company’s bad weather standards and tips for creating a more secure work environment.

Computers and Technology

Without setting certain parameters, Internet usage can potentially spiral out of control. Your employee handbook should describe the policies for appropriate computer and software use, including your security standards.

Employee Benefits

While this topic should be thoroughly discussed during onboarding of your new employee, this is a great spot to clearly document the details of your benefit offerings. This could include everything from workers’ compensation, COBRA, retirement assistance, tuition reimbursement, business travel, etc.

Leave Policies

For the leave policies that are required by law (such as family medical leave, jury duty, military leave) as well as vacation, holiday, bereavement and sick leave should be documented in this section.

Essential Provisions

This sort of miscellaneous section should include a disclaimer that states that the handbook should not be interpreted as an employment contract and explain if your employees are to be employed at-will. Finally, you will need written acknowledgement by your employees that they’ve reviewed the handbook.

Your employees are your greatest asset, so providing them with the right expectations from the very beginning will save you from questions or concerns later on. Always make sure to have a legal consultant look over your handbook before it’s published.

Disclaimer: Please note that this is not all inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your own legal advisor regarding specific application of the information to your own plan.  

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