What is an employee handbook?
An employee handbook is a comprehensive document that outlines company policies, procedures, expectations, and culture to guide employees throughout their employment journey. It serves as a reference tool for employees to understand their rights, responsibilities, and legal obligations while defining what they can expect from their employer.
Employee handbooks typically include company mission and values, workplace guidelines, code of conduct, employee rights and obligations, expectations between employer and employee, and policies for leave and time off. While businesses are not legally required to have an employee handbook, it provides an effective way to distribute required notifications, crucial information, and communicate a company's unique personality.
Related terms: employee manual, staff handbook, company policy manual, personnel manual
Why should HR leaders care about the employee handbook?
Employee handbooks provide essential context so employees can understand their place in the company culture and make decisions aligned with company values. The manual helps make a positive impression on new hires, acquaint employees with the company during onboarding, guide decision-making, explain expectations and rights, emphasize important policies, and avoid legal issues.
Employee handbooks benefit both employees and employers by establishing a positive and productive work culture. For employees, handbooks provide an understanding of company policies, clear expectations of performance and behavior, a sense of the organization's commitment to its workforce, and a resource to turn to when questions arise.
For employers, handbooks create opportunities to establish performance standards and behavioral expectations, create a framework for conflict resolution, outline essential policies and procedures, reduce legal liability by laying out relevant laws and regulations, and demonstrate a commitment to compliance.
What should be included in an employee handbook?
An effective employee handbook should include 7 key components:
- Company mission, vision, and values - Provides employees with a clear understanding of the company's purpose and goals
- Workplace policies and procedures - Outlines rules and expectations in clear, concise language with relevant documents or links
- Employee benefits and compensation - Details paid time off, health care offerings, retirement plans, and other compensation information
- Code of conduct - Clearly states rules and expectations of behavior for employees
- Health and safety measures - Outlines procedures for protective equipment, hazardous materials, emergency procedures, and OSHA regulations
- Diversity, equity, and inclusion policies - Demonstrates the company's commitment to DEI values and how they're implemented
- Disclaimer and acknowledgement form - Confirms employees have read, understood, and agree to the terms set forth in the document
Employee handbook contents vary depending on your industry, mission, values, and state. Additional sections often include company history, orientation procedures, definitions of employment classifications, pay and timekeeping information, leave policies, performance review guidelines, promotion and transfer procedures, technology use policies, and grievance procedures.
How often should an employee handbook be updated?
An employee handbook should be reviewed and updated at least once a year to ensure policies accurately reflect the continually changing work landscape. HR professionals should have a lawyer review the handbook annually or whenever significant changes occur, such as a merger, acquisition, or human resources technology transformation.
Regular reviews ensure handbooks stay current with legal changes and company growth. Setting a schedule at regular intervals prevents updates from falling off the radar. Many larger companies release revised handbooks annually or at other regular intervals to maintain compliance with federal, state, and local employment laws.
Are employee handbooks legally required?
There is no federal requirement that employers must have an employee handbook, and state laws vary. However, hiring employees without one can leave companies open to significant liability.
While not legally mandatory, employee handbooks are strongly recommended as a business necessity for firms of any size. Federal and state laws and the growing number of employee-related litigation cases suggest that a written statement of company policy provides crucial protection. For example, in 2005, companies paid out more than $378 million in discrimination non-litigated settlements, and in 2014, the EEOC received 88,778 discrimination charges filed against private businesses.
Some legal counsels recommend very small companies with fewer than 10 or 15 employees avoid having a handbook because they may find it difficult to dedicate time or resources to maintaining an up-to-date document. It may be less risky for very small companies to have no documented policies rather than misleading, out-of-date, or incomplete policies.
What content types are typically found in employee handbooks?
Employee handbooks typically contain 3 types of content: cultural content (welcome statement, company mission or purpose, company values), general information (holiday arrangements, company perks, policies not required by law, policy summaries), and case-specific content (company policies, rules, disciplinary and grievance procedures, and other information modeled after employment laws or regulations).
The handbook structure usually follows 4 overarching categories: company mission statement, values, and history; company policies, standards, and guidelines; career, compensation and benefits information; and company procedures. Each category contains detailed information tailored to the specific work environment and employees it applies to.
How should employee handbooks be distributed?
The best way to distribute an employee handbook is to make it available electronically through your company intranet portal or provide each employee with a printed copy for reference. Employee handbooks are almost always part of a company's onboarding or induction process for new staff.
HR workflow software can communicate changes to company handbooks to ensure everyone is aware of updates in a timely manner. This type of software allows you to easily capture each employee's acknowledgement of changes and send automated reminders if necessary. Employers often give the employee handbook to new hires at the beginning of the onboarding process to acquaint them with the work culture.
Should employee handbooks differ for remote and in-person employees?
Employee handbooks should be different for remote and in-person employees. Remote employees need specific guidance on how to work remotely and the policies and expectations around this, including guidelines on communication, technology needed for remote work, and how to collaborate with colleagues.
An in-person handbook should focus more on the physical workplace, such as expectations around attendance, dress code, and safety procedures. Each employee handbook must be tailored to the specific work environment and employees it applies to, ensuring all relevant policies and procedures are clearly communicated.
How does an employee handbook compare to similar documents?
An employee handbook is often compared to 2 related documents:
| Related Document | Key Distinction | Usage Context |
|---|---|---|
| Policy and Procedure Manual | Contains detailed step-by-step descriptions of how to perform company processes; handbook provides high-level overview | Technical, detailed operational guidance for specific tasks and procedures |
| Employment Contract | Employee handbook is not a contract and does not create employment agreement; contract establishes legal employment terms | Legal agreement defining specific terms of employment relationship |