Why Do I need an Employee Handbook?

Charles Read, CPA, USTCP, IRSAC
President/CEO GetPayroll
Find me on LinkedIn

An employee handbook/policy manual is an important communication tool between you and your staff. In the employee handbook/policy manual, you detail everything that you want your staff to know about how to work within your business. It sets an expectation for your new hire of what you expect from them as well as what they can expect from your company.

Additionally, legal information is also included, such as an employee’s right to work, Family Medical Leave Act (FMLA), nondiscrimination laws, and company policies: sick time paid holidays and earned vacation, uniform, working conditions, and more. It is a document that is provided to every staff member upon hire.

Why should you create an Employee Handbook/Policy Manual?

Consider this: All it takes is just one employee to cause you and your business problems. One.

Have These Scenarios Ever Happened to You?
An employee is repeatedly late for work. You talk to him about it, give him warnings that he could lose his job if he is continually late. But he keeps being late. Do you have cause to fire him?

Nope.

An employee is not doing her daily tasks to keep her workstation clean and stocked, and it’s noticeable. Supplies in her room are too low, trash is not being emptied, and food scraps are strewn over the work area; the list goes on. You ask them politely to please keep their work area stocked, organized, and clean. The next day, the same thing. And the next day. You ask again, and again. You are fed up and want to fire that worker. Can you fire them for a cause?

No, you can’t.

Why not? The answer is simple: You don’t have a written policy that states that an employee may be terminated if they are late a specific number of times over a specific period of time. You don’t have a written task list, that your employee has acknowledged receipt of, which says she will do these tasks daily (or even at all) and maintain certain standards. The possible result if you fire them without those policies in place? Paying unemployment or even getting hit with a lawsuit.

Benefits of Creating an Employee Handbook/Policy Manual

While writing an employee handbook/policy manual may seem like an insurmountable task, it’s really not. There are lots of resources on the Internet that can give you a great starting point, especially to handle the legal jargon.

There are many benefits to having your own manual.

It introduces your new hire to your company, company values, and culture.
Set a strong foundation by sharing your mission and vision for your company, allowing for a faster introduction to the level of standards you expect from them, as well as give them an easier sense of belonging.
It elaborates for the employee what is going to be expected of them.
Roles, responsibilities, policies, and procedures for requesting time off, how to handle sick days, timekeeping, and more.
It provides detailed information on what the employee can expect from you and management.
Leadership style, management best practices, and other legally required information is detailed in this section.
It clearly communicates your specific company policies.
Standards of conduct; compensation; daily, weekly, and monthly tasks that are required of your employee; uniform/appearance; arrival time; and tools policy are some areas you can address here.
It provides an easy way to share the benefits and perks your company offers. Vacation pay, sick pay, general PTO days, health insurance, maternity leave, 401(k), gym membership, or any other benefits and perks are clearly listed, as well as any eligibility requirements for each benefit.
It keeps you compliant with state and federal laws. Family Medical Leave Act (FMLA), Military Leave, Fair Labor Standards Act (FLSA), Occupational Safety and Health Act (OSH), are some of the laws you’ll want to include here.
It protects you against employee claims.
If anything at all, the last point should get your attention and solidify why you need to have your own employee handbook/policy manual.

What Goes into an Employee Handbook/Policy Manual?

There are some things you really need to include in your employee handbook/policy manual:

Equal Employment and Nondiscrimination Policies
“Per the U.S. Equal Employment Opportunity Commission (EEOC): The U.S. Equal Employment Opportunity Commission enforces federal laws prohibiting employment discrimination. These laws protect employees and job applicants against employment discrimination when it involves:

Unfair treatment because of race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability or genetic information.
Harassment by managers, coworkers, or others in the workplace, because of race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information.
Denial of a reasonable workplace accommodation that the employee needs because of religious beliefs or disability.
Retaliation because the employee complained about job discrimination, or assisted with a job discrimination investigation or lawsuit.”1
However, not everyone is covered under the EEOC.

To be covered under the EEOC for general discrimination categories listed above, a business must have a minimum of 15 employees for at least 20 calendar weeks. Otherwise, they are not covered.
To be covered under the EEOC for age discrimination practices, the business must have a minimum of 20 employees for at least 20 calendar weeks. Otherwise, they are not covered.
To be covered under the EEOC for pay discrimination practices, the business must have a minimum of one employee. So, basically, as soon as you hire your first employee, you’re bound by this law.

To learn more about what may or may not be covered in your business, go to www.eeoc.gov/employers/coverage_private.cfm and www.eeoc.gov/employers/smallbusiness/requirements.cfm.

Family Medical Leave Act Policies
“The FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. Eligible employees are entitled to:

Twelve workweeks of leave in a 12-month period for:
The birth of a child and to care for the newborn child within one year of birth.
The placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement.
To care for the employee’s spouse, child, or parent who has a serious health condition.
A serious health condition that makes the employee unable to perform the essential functions of his or her job.
Any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty.”
Twenty-six workweeks of leave during a single 12-month period to care for a covered servicemember with a serious injury or illness if the eligible employee is the servicemember’s spouse, son, daughter, parent, or next of kin (military caregiver leave).

Some states have more liberal rules for family leave than federal policies. If your state has policies about family leave, they need to be incorporated in your employee handbook/policy manual. In almost all cases, you will be required to follow the policies that give the most benefit to the employee.

Workers’ Compensation Policies
Workers’ compensation is a type of insurance that provides employees injured on the job with medical benefits and dollar benefits for lost wages and permanent disabilities. In return for providing this coverage for on-the-job injuries, the employer is relieved of tort liability for such injuries that are due to negligence.

Workers’ compensation policies vary from state to state. Every state requires that you have workers’ compensation coverage, except Texas.

What Else Should You Include in an Employee Handbook/Policy Manual?
This list has some of what you may want to include in your employee handbook/policy manual. It is no means exhaustive, as you may add whatever you consider important for your company and it provides additional topics to consider that may not have been covered. Regardless, make sure that the last item of acknowledgement is present and returned to you signed for inclusion in the employee’s personnel file or the manual is a waste of time, as it will not be enforceable without proof that the employee has read and understood the Employee Handbook/Policy Manual.

Introduction
Welcome Message
Company History, Values
Mission Statement
Ethical Code
Proprietary Information Policy

Employment Policies
EEOC Policy
Sexual Harassment Policy
Nondiscrimination Policy
At-will Employment Policy
Attendance Policy
Promotion Policy
Termination Policy
Rehiring Policy
Personnel File Policy

Workplace Policies
Dress Policy
Drug/Alcohol/Smoke Free Workplace
Workplace Violence
Weapons at Work
Safety and Security
Workplace Visitors
Gift Receipt Policy
Travel Policy
Mileage Reimbursement Policy

Performance
Employee Conduct and Performance
Immediate Employment Termination
Progressive Discipline
Conflict Resolution
Complaint Procedure
Employment Termination
Return of Company Property

Compensation and Benefits
Benefits
401(k) Plan or Other Retirement programs
Bonuses
Workers’ Compensation
Time Clocks
Expense Reimbursement
Employee Discounts

Time Off
Paid Holidays
Paid Time Off (PTO)
Family and Medical Leave (FMLA)
Military Leave (USERRA)

Equipment and Electronics
Telephone Use
Company Tools, Equipment, and Supplies

Acknowledgment
Employee Handbook/Policy Manual Employee Receipt and Acknowledgement

There are many resources available to help you create an Employee Handbook/Policy Manual, ranging from templates to what to include. Here are a few to get you started.

www.ThinkHR.com

https://formswift.com/employee-handbook

https://www.business-in-a-box.com/templates/employee-handbook/

www.shrm.org/resourcesandtools/tools-and-samples/pages/employee-handbooks.aspx

Providing Your Employee Handbook/Policy Manual to Staff
If you have written your own employee handbook/policy manual rather than using an outsource service you may want to have an employment attorney review it before releasing it. They can check for policies that are self-contradictory, language that does not succinctly convey your meaning, and for policies or language that contradict the actual law.

Then when you have had it reviewed and are ready to provide it to all of your employees, follow these guidelines:

Communicate It: All current employees need to have a current copy of the employee handbook/policy manual. You should have the signed acknowledgment page in their personnel file. Put a digital version on your internal webpage for your employees to be able to check at anytime.

Use It: The employee handbook/policy manual needs to be your HR bible. Follow it! It has the procedures for dealing with employee issues. Using it hit or miss will lead to it becoming unenforceable and create legal problems if you then try to enforce it later. If you find a circumstance that is not covered, update and republish (with required acknowledgements) as soon as feasible.

The Importance of an Acknowledgment Document
You invest a lot of time into writing your employee manual, have it reviewed by your attorney, and make any necessary changes. It’s ready to distribute. Wait.

It’s vital to have an “Employee Handbook/Policy Manual Employee Receipt and Acknowledgment” document that is provided to the new hire with the manual. This way even if the employee’s copy of the manual is lost, there is proof it was provided to them and they said they had read it and understood it. They cannot say they were unaware of the policies in place when they were hired. You should also get a new acknowledgement every time you promulgate revisions to the handbook/policy manual.

The moment the employee acknowledges the employee handbook/policy manual in writing they are required to follow it. This protects you in the future if you have to apply policies that the employee or their attorney don’t like. They have agreed to them, in writing! If they don’t want to sign and acknowledge the policy manual you have a legal safety net to terminate them without legitimate backlash.

Make sure you keep a copy in your locked personnel files.

An acknowledgment document can be very simple or more complex. Either way, be sure to include these basic components:

Instructions to read the employee manual, an agreement that they understand everything in the handbook/policy manual and agreed to abide by the policies, sign and date the document.
Due date on which they must return to you the signed document. This can be within days from the hire date for new employees and a specific date when issuing a revised handbook.
A warning that this acknowledgment is going to be kept permanently.

GetPayroll offers flexible HR outsourcing plans to meet a variety of business needs including basic compliance, strategic planning, and fully outsourced HR. Our Tier 1 option provides you with a employee handbook to ensure compliance and peace of mind.