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An employee handbook is given to new employees from the employer. The handbook is used to inform employees about their job duties and expectations set by the employer.

What is an Employee Handbook? 

An employee handbook or manual is a booklet that provides information and guidance to employees regarding their organization's history, goals, values, practices, policies, and procedures. If created properly, an employee handbook is a valuable resource for both employees and employers that clearly defines the expectations of each party. Employee handbooks may also cover other subjects such as company dress code, compensation policies, the amount of sick time or paid time off available for employees, as well as additional employee benefits.

Employee handbooks also help prevent legal disputes between employers and employees. In order to ensure that all employees have received and reviewed the employee handbook, they may be required to sign an acknowledgment form.

Moreover, an employee handbook establishes important legal protections for employers and defines the employment relationship. For example, if an employee is fired, the “at will” policy in a well-written handbook should protect the company from legal retribution.

An Employee Handbook Should Be all of the Following:

Your Company’s Constitution

  • Yes, we realize how dramatic "Company Constitution" sounds. However, it’s a fair description. Your employee handbook is your number one resource for dispute resolution, intra-employee mediation, and performance review. Human Resources will use it, employees will (or should) use it, and you will refer to it as needed when revising policy or developing your company’s infrastructure.

The Foundation of Your Workforce

  • What kinds of employees do you want working for you? Employees who perform the way you want them to, of course. The employee handbook is a handy definition of what an ideal employee is, how he or she behaves, and what standards your current employees should strive for.

Protection against Lawsuits

  • Items such as the disclaimer, the non-contract clause (stipulating that receipt of the handbook in no way guarantees employment) and the assumption of your right to change employment policies at-will, grant you the status you need to keep things running smoothly. Other policies, such as the sexual harassment policy, non-discrimination policy, and termination policy, dictate what is and isn't okay, and releases you from liability should unsavory events occur within your staff.

A Window on your Corporate Culture

  • It’s true that many employee handbooks read alike. This is because many busy entrepreneurs copy from an employee handbook sample or make lazy work of free employee handbook templates they've downloaded from the internet. Templates and samples can be very useful tools; however, when using them, take the time to customize your employee handbooks tone and provisions to suit your corporate environment. What kind of image does that give your business, anyway? Design your employee handbook keeping your ideal boss-voice in your mind. Do you want to intimidate your employees? Do you want to discipline them right off the bat? Or do you want to project a more casual, congenial image? The tone, as well as the content of your employee handbook, can say a lot about who your company is and what it values.

Employee Handbook vs Employment Contract

There are a few important distinctions between employee contracts and handbooks. First and foremost, an employment contract may be legally binding while an employee handbook is not--although it should outline various company legal policies. Secondly, employee contracts are specific to each individual employee and therefore apply solely to the individual who signs one. An employee contract details the legal rights and obligations of the employee. To that extent, an employee must be consulted if an employer changes the terms of the contract.

Employee handbooks, on the other hand, detail guidelines, policies and procedures for all company employees. These include expected behaviors and practices that may not be legally binding (i.e. punctuality). Furthermore, with handbooks, employers can update the handbook as long as their revisions are sent to employees.

Who needs an Employee Handbook? 

Why do you need one? 

Handbooks give companies the opportunity to detail the expectations of all staff members in a standardized way. They also help establish the company’s standards of accountability. Additionally, they provide a platform to share the organization's culture, values, and mission with its employees, and provide a resource for employees regarding their benefits, perks, policies, and so forth.

Without a written handbook, employees may be left with an incomplete understanding of their benefits, and may therefore not fully take advantage of all you offer as a company. More seriously, an employee handbook clearly communicates expected workplace behavior and performance. Therefore, if issues arise with employee behavior or performance, a handbook makes it difficult for the employee in question to claim ignorance.

What about small startups? 

Do startups need an employee handbook to cover only a few people? We recommend any organization with more than five employees draft an employee handbook. Creating one in the early stages of the company’s development enables the founders to work out company values and policies at the ground-level and helps ensure that culture imbues future growth.

More specifically, creating a handbook allows you to sort out smaller policies, like which expenses you’ll reimburse, while those costs are still marginal.

What about family businesses?

We also recommend that family businesses create an employee handbook, even for family members. Often family operations have difficulty separating business from family. Having a written handbook should help members of a family business avoid difficult disputes over work policies that can affect relationships at home.

 

 

Additional Legal Considerations for Employee Handbooks

Legal considerations are industry and geographically specific. Different industries and states have different laws regarding written documentation of company policies. However, regardless of the industry or location, certain organization policies and procedures must be documented in writing. Those include, for example, anti-harassment policies and internal reporting policies (in California, specifically).

Employment Basics

The purpose of an employee handbook is to act as a guide and reference for employees related to the policies of the company. While an employee handbook may contain various informational components, there are some basic things that every handbook should address:

  • That the company is an equal opportunity employer
  • The types of employment contracts offered
  • How the company recruits and chooses employees, including whether background and credit checks are required
  • The attendance policy for employees
  • The dress code for employees
  • Benefits employees are entitled to receive 

Traditional Company Policies

Traditionally, employee handbooks explain other policies as well. These include, but are not limited to:

  • Confidentiality. Confidentiality policies are written for the purpose of explaining the company’s standards for protecting both internal information and information related to its clients. This section of an employee handbook is often written to reflect the statutes and regulations for both the location of the business as well as for its industry. 
  • Data protection. Data protection policies are similar to confidentiality policies in that the purpose of it is to explain the standards of protecting company data and client data. Certain industries must maintain certain data protection standards. 
  • Harassment. Harassment can take many forms, and it can cause great employees to look for somewhere else to work. A harassment policy explains what employees may do to report harassment and how that report will be investigated. It also explains what happens in the event that the report is found to be true. It also explains how the company defines harassment. 
  • Violence. This policy addresses an issue that is more and more common in the workplace: violence. This may include how employees should attempt to protect themselves and what the company will do in the event that one of their employees contributes or instigates violence in the workplace. 
  • Safety and health in the workplace. There are state and federal regulations that address what companies must do to keep their employees safe as well as the posting of certain information in the workplace. In addition to giving a brief explanation about those requirements, this part of the handbook may also explain what actions the company takes to help protect their employees. This policy also explains that the company is drug and smoke free, discusses how emergencies should be addressed, and may also explain how employees may file a worker’s compensation claim if they are hurt or made ill because of their working conditions.

Comprehensive Communication Policies

A comprehensive communications policy is essential to the success and branding of a business. It helps ensure that all clients, guests, and anyone who interacts with the company are treated the same way. With communications continuing to expand and involve different types of technology, it’s important to address that technology and how it should be used by employees to the benefit of the company. 

  • Email. An email policy should include whether attachments may be sent, the types of attachments that may be sent, the use of the out of office feature, and if there is a specific amount of time by which responses to inquiries or to clients should be made. For example, all business-related emails requiring a response shall receive said response within 24 business hours. 
  • Phone. While phone systems continue to evolve, good telephone manners are still a necessity. Voicemail greetings and how long one should take, at the maximum, to return a call or message should be explained. There should also be an explanation of the amount of time a caller may be left on hold before checking on them to politely inquire if they would like to continue to hold or leave a message. 
  • Video conferencing. This policy should explain that the company’s video conferencing is for business use only, including Skype and Google Meetings. The handbook should address how to start a meeting, join a meeting, and send out invitations to a meeting. It should also explain how users should ensure that they are muted unless they are hosting the meeting or if it is time to ask or answer questions. 
  • Company social media. Social media is now seen by the majority of consumers as a way to connect with their favorite brands, learn more about companies, and get help of some kind. The social media policy should explain how issues should be addressed, the power that the social media agents have to resolve issues, and how they should interact with each person. This is important because the social media manager directly represents the company in the eyes of the public. 

Instant communication methods between team members. More and more companies have adopted the use of instant team and private messaging such as Slack. Some project management software also includes messaging. This policy should explain what is expected of the employee. For example, how often are employees required to check their messenger?

Company Biography

A company biography explains a brief amount of company history to the employees. It also explains the company’s mission statement and values. Employees are better engaged when they understand and support the company as a whole.

Benefits, Compensation, and Incentives

Benefits, compensation, and other incentives are influential for attracting and retaining talented employees. Sometimes, employees have questions about their benefits and their pay. This is why it is important to properly structure these sections of the handbook. 

  • Benefits. The structure should make it easy for employees to find the information they need. Start by providing a short list of facts such as when employees qualify for benefits and how they can get into contact with both HR and the providers of the insurance policies offered. Then, create sub-headers for each benefit so that employees can quickly find additional, more in-depth information. Common benefits include health insurance, disability insurance, life insurance, retirement benefits, paid time off, maternity and paternity leave, vacation days, sick leave, and how employees can file a claim for worker’s compensation if needed. Each of these sections should include helpful information.Take paid time off as an example. How is that time earned? How much of that time is earned during a pay period? How do employees put in a request to take time off? Does the time roll over each year? Can that time be cashed out? Can it be donated to other employees undergoing a hardship? 
  • Compensation. Pay in important to address because it’s a critical factor for employees. They’re likely to refer to this information on a regular basis. This section should include subsections that explain the pay periods (for both salaried and hourly employees), how pay is given (i.e., direct deposit, paper check, or a pre-paid card), basic information about salary, basic information about bonuses, when performance reviews take place, whether there is merit pay or seniority pay, how promotions take place, how employees can learn about transfer opportunities, and information about travel and other out of pocket expenses. It should also explain how employees can get more information about these important policies specifically for their role. This is important because salaried employees and hourly employees may be treated a bit differently in certain aspects, such as overtime pay during a pay period. 
  • Incentives. Offering additional incentives are part of what make a company standout. This particular part of the employee handbook should be clearly arranged with each incentive listed as a subheading with detailed yet easy to understand information underneath.

Employee Handbook Sample Library

  • Pronto Marketing uses a clear, concise employee handbook with a modern look. It’s easy for employees to find what they need. Employees can even see an example of what to expect on their first day!
  • Motley Fool provides its employees with an interactive online handbook that is made up of 45 slides. In addition to a clever title, Fool Rules, it covers everything employees need to know while highlight what’s most important. It also uses concise languages. 
  • Dollar General has an online handbook that covers practically everything anyone can think of. It’s comprehensive nature is what makes it so great. 
  • Netflix has a great handbook that is made specifically for salaried employees. It highlights the company’s culture, values, and the behavior they hope to see in all of their employees. It also covers the basic information one expects in an employee handbook. The text is easy to read because it is spaced out well and uses everyday language.
  • PeopleHR has a short, easy to read employee handbook that focuses on both company policies as well as the on-boarding experience. The handbook is a PDF that is only 17 pages long. Additionally, it explains how progress is measured.

More Resources

See below a few additional resources and examples of employee handbooks.

In Conclusion

Employee handbooks act as a foundation for your company, laying the groundwork for all operational behavior, policies, and standards in relation to federal and state law. With the help from this article, you can not only create an original employee handbook that uniquely shares the voice of your company, but it also ensures that your employees operate and work in the most efficient way.

Study of the best and worst states for employee benefits in 2018.

Methodology

Our team at FormSwift wanted to determine which states are the best and worst for employee benefits. We created a ranking by evenly weighting the following factors to come up with a final percentage for each state: per capita personal income, average employer contribution for health insurance, number of healthcare tiers available for employees with dependents, state average pension funding for public employees, and percentage of vacation time used by employees in each state.

If you are looking for our Trump PTO vs the American Worker Study, you can find the feature on PopSugar here: https://www.popsugar.com/news/Trump-Vacation-PTO-vs-American-Worker-Firefighter-Teacher-43966533

Download a PDF or Word Template

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Sample Employee Handbook

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Sample Employee Handbook

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