A policy, or employee, handbook is a vital tool and resource for any business. But creating one can be a challenge.
[This article was originally published in December 2017. It has been substantially revised and updated to reflect current information and trends.]
According to several HR experts, most small businesses do not have a written policy manual or employee handbook, an employee orientation process, or even a proper and documented termination procedure.
Yet all of these tools and processes can be the first line of legal defense to avoid costly employee lawsuits.
If your organization is missing one or more of these items the good news is that it's never too late to get them developed and documented. And one of the most crucial items is a policy manual or, as we like to call it, an employee handbook.
Developing Your Employee Handbook
In some organizations, a distinction is made between a "policy manual" and an "employee handbook." In fact, the Society for Human Resource Management (SHRM) suggests,
"A policies and procedures manual is a reference tool for managers and supervisors. This tool is much more complete in detail than the employee handbook and should be used for back-up when more information is needed to explain a policy or when a deeper understanding of a process is desired."
This is a good approach, particularly for enterprise-level organizations employing hundreds or even thousands of workers. However, for most SMEs and smaller "mom-and-pop" businesses, the company's policies should be able to fit into one accessible document.
And we believe that a "policy" document should strictly communicate company policies and leave the documentation of processes and procedures to a separate document. A procedure is not a policy per se, but a set of instructions for how something is done. A policy is a guideline managing employee health, safety, accountability, and interactions with customers.
Policies can also be described as the company "rules" for behavior, the parameters and constraints within which everyone functions to achieve individual and corporate success.
Keep in mind, too, that an employee handbook is written for employees. They are your audience. And, as the SHRM notes,
"It is most often written using a straightforward layout for easy referencing of company policies and is a vehicle for familiarizing employees with basic company policies and benefit programs, as well as the general expectations of the company, including acceptable and unacceptable behavior and disciplinary measures."
What's In a Name?
One of the first things you will want to establish is what you will call your handbook. While the more conventional choice is to simply refer to this document as an employee, or company, manual or handbook, this is not required.
And, actually, a little bit of creativity can make your policy document much more accessible and interesting.
Some suggestions include "Team Guidebook", "Company How-To Guide" and "Company Culture Manual." The goal is to come up with a title that engages your staff and reflects the prevailing culture of your organization.
Another suggested caveat is to preface your handbook with the company mission. This establishes up-front why you do what you do and provides a relevant context for the content of the handbook. Your company's stated mission, along with an articulated list of company values, will set the stage for more meaningful policies.
(Don't have a company mission statement? Here's a solid resource for developing one.)
A third item to keep in mind is that the policy handbook is just for that: policies. Too many organizations try to put too much information into this document under the rubric of "Policies and Procedures". But, as we noted previously, procedures should have their own document apart from the company policies. Keep it simple!
A Well-Written Employee Manual and Labor Law Compliance
A common question from employers and HR managers is whether employee policy manuals, or handbooks, are required by law. There are no federal or state laws specifically requiring an employer to have an employee handbook.
The state of California, for example, does not require businesses to have a handbook. However, keep in mind that in California, if a manual or handbook is created then there are policies that must be included.
According to CalChamber,
Certain policies are mandatory and must be included in your employee handbook. For example, California employers must have a written harassment, discrimination and retaliation prevention policy. Including these policies clarifies for employees their rights and obligations, and protect you from potential liability.
Although a policy handbook is great for clarifying and publishing company policies, it can actually lead to potential lawsuits if it's done incorrectly. Employers must ensure that their policies do not violate any federal or state laws or override the at-will employment relationship.
HR Best Practices for Effective Handbook Building
Here are some "best practices" and tips for creating an effective employee handbook.
Avoid legal or industry-specific verbiage. In other words, clarity and brevity should be your guide with language. This is not the place for every labor law issue that might arise in your business. In addition, strive to keep the wording simple and informal. The goal is to communicate.
Be clear with expectations, but avoid "over-regulating". Company rules and policies need to be clear, concise and sensible. This means having them reviewed and reasonably critiqued. This is especially true for any sections outlining disciplinary actions that may be taken by the company. And avoid trying to create a policy for everything. Expect adults you employ to possess a degree of common sense and ethical integrity.
Acknowledge and define digital conduct. The pervasiveness of digital media and the constant need for security means this is a high priority item for company policies. Providing clarity and a comprehensive overview of digital use and practices is essential. For example, include policies for Internet use while at work, and what can be posted on behalf of the company, or as an employee.
The Society for Human Resource Management (SHRM) offers some general steps for developing an employee handbook.
- Review and revise company policies
- Create an outline of what to include
- Create summary statements of each policy
- Add summaries according to outline
- Review policy handbook
- Submit final version for legal review
- Distribute approved handbook
While every company handbook will be unique due to the unique nature of policies, etc. there are some common items that should be included, as well. According to the SHRM,
Important factors to consider are legal mandates for federal and state laws that affect employees, such as the Family and Medical Leave Act, COBRA, Equal Employment Opportunity Commission (EEOC) anti-discrimination laws, the Americans with Disabilities Act, and the Fair Labor Standards Act. If an employer fails to communicate these in the employee handbook, there may be confusion and noncompliance with the laws.
One last thought: despite the appeal of relying solely on a digital resource, providing a printed, bound copy for every employee is a great way to ensure that they literally have the policies "at hand" and it adds a sense of weight and legitimacy to the company policies.
Getting Professional Help with HR Practices and Compliance
In addition to company policy best practices, opting for online payroll software for your payroll process is a viable option for staying in compliance on the payroll front. And another "best practice" is to consider outsourcing.
This can be done by simply outsourcing one process such as payroll. However, with a full-service provider such as Accuchex, you also have additional options for outsourcing as well.
Let Accuchex help you in managing your HR needs, payroll processes, and staying on top of compliance demands. Get your Free Download: Payroll Outsourcing Guide to help you make an informed decision or call Accuchex Payroll Management Services at 877-422-2824.