6 Essentials When Creating an Organizational Employee Handbook

Include These Elements in a Company Employee Benefits and Policy Manual

Employee Handbook
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If your company is new to hiring employees or just hasn’t take the time to create a formal employee handbook, there is always the risk that the company could be faced with an expensive human resources related lawsuit. Time to stop playing Russian roulette. It’s never too late to develop a simple and effective employee handbook that can prevent this from happening.

What is an Employee Handbook?

An employee handbook or manual is a central repository of all your workplace policies and procedures as well as information about your company that helps maintain a harmonious place of employment.

This can be a printed or digital document, made up of certain vital sections that cover everything from organizational structure and leadership, to employee benefits and workplace policies. It is the cornerstone of any human resource department and can assist with employee recruitment and retention efforts.

The Essential Elements of an Employee Handbook

Legal and human resource experts believe that there are some elements that all employee handbooks should cover. These are the elements that will help ensure that your employee handbook complies with all state and federal employment, payroll tax and employee benefit laws. Because this is a living document, an employee handbook will always be getting updates as your company changes. However, the essential elements maintain consistency and organization to the employee handbook for the long term.

Here’s what all employee handbooks need to include:

#1 – Company Structure and Disclaimer Information

Each company is a unique gathering of people and processes, therefore the very first section of an employee handbook should outline the structure and nature of the business in clear terms. This section should include a description of the company leadership, how company tasks or departments are organized, the company vision and mission statements, and how the company plans to meet its objectives.

The company also needs to include a disclaimer that presentation or possession of an employee handbook does not imply a legal contract of employment; a step that can prevent many HR lawsuits.

#2 – Definitions of Employees

The employees who work for your business have individual descriptions and tasks, but the employee handbook should focus on the legal lingo around employment terms. For example, if the region in which your company operates is an at-will state, then this must be stated in the manual. If the company only hires 1099 independent contractors, this must be defined. Clearly state that the nature of any work conducted on the behalf of your company is under the terms as appropriate for the types of employees you have.

#3 – Business Hours and Payroll Information

The company should state the actual business hours that the company is active, as well as the required work hours for employees and contractors. For example, the company may be open Monday through Saturday from 9am to 6pm EST, but hourly employees are only required to work shifts of 40 hours per week during these time limits. Make sure you state both the work days and hours per day required, as well as overtime rules that comply with state and federal requirements.

Provide information about how and when overtime pay is given, and if there is holiday pay, paid time off and unpaid time off rules. Give information about timekeeping, payroll dates, and employee responsibilities as part of these tasks.

#4 – Work Policies and Procedural Information

This is often the most detailed and lengthy section of an employee handbook, and the area that may change often. The policies and procedures section includes anything related to company facility and equipment use, safety and hazards, business continuity and disaster management, sexual harassment rules, drug and alcohol avoidance policies, pre-employment and random criminal background checks, company information and client handling, corporate dress code, time card and pay periods management, business closure and paid holidays, workplace safety and workers compensation claims, and more.

Make sure this section is reviewed carefully by a seasoned Human Resource professional.

#5 - Employee Benefits and Perks

The company employee manual also needs a section that’s dedicated to the group-sponsored employee benefits and perks offered to all employees. Your handbook will include information about the types of health insurance plans, life insurance, retirement plans, voluntary supplemental benefits, and employee savings arrangements offered. You will want to include the current year employee benefit plan rates, as well as information about eligibility requirements and access to enrollment forms. Add a listing of any special company perks here too, such as training and tuition support, company discounts, technology access, and other benefits that are unique to your organization.

#6 – Employee Performance and Disciplinary Measures

Finally, the employee handbook needs a section about how and when employee performance reviews will be conducted. This section also needs to include information about potential performance issues and disciplinary actions that may take place if and when employees violate company policies or do not meet performance metrics. It’s very important to include this information to avoid potential wrongful termination lawsuits and facilitate unemployment insurance claims in the future.

Wrapping Up the Employee Handbook 

Once you have created a standard employee manual, it’s important to have it reviewed by a qualified attorney who is well-versed in human resources laws to make sure it’s legally enforceable. If the employee handbook meets these requirements, it can then be distributed to your employees in a printed and digital format. Include an employee sign off sheet to document receipt of your new employee handbook. Whenever new policies or information are added or revised, send out an update to all employees following the same steps.  

Image Credit: © emiliezhang - Fotolia.com