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Preparing an Employee Manual

Why You Need a Handbook

A company handbook is similar to an instructional book for board games: It defines boundaries, establishes ground rules and explains what is (and is not) acceptable behavior. Your company handbook should serve as a reference guide for your employees to let them know what your company expects from them.

There are no laws requiring you to have a handbook; however, certain policies are required to be put in writing. Employee handbooks are an easy way to share this information, while providing several other benefits for employers:

Legal protection: By clearly stating your employment policies and expectations, handbooks can protect your business against different lawsuits. For example, if your handbook includes a disclaimer that all employment is at-will, employees will find it harder to prove breach of contract claims.
Open communication: Employees expect employers to communicate and share important information with them. Having a handbook shows that your business values this type of communication.
Behavioral standards: Your handbook should outline what behavior your company finds acceptable and, just as important, what behavior is unacceptable. Including disciplinary actions also shows employees what the consequences are if they fail to keep these standards.
Fair treatment: While handbooks shouldn’t offer precise instructions on how to manage every problem, they should provide a framework for managers to follow. This way, all employees are treated fairly which, again, can help protect you against certain lawsuits.
Policy improvements: The process of writing a handbook forces you to think through and evaluate your employee policies. By taking the time to put everything in writing, you can select the best benefits for employees, narrow down the most effective ways to manage employees, and identify potential problems long before they take up valuable time or company resources.
Developing an employee handbook may seem like a daunting project – but it’s a critical document that helps you resolve issues, communicate with employees, set standards and defend your business against legal action. No matter the size, every business needs a handbook well before the first employee is hired.

What Goes in a Handbook

Of course, handbooks are only useful if they contain valuable information. Here’s what you should include in your employee handbook:

Company mission or values: Stating your company’s priorities can help outline what types of behavior is expected from employees.
Required notices: Include any policies you are required to put in writing, such as being an equal opportunity employer, having a drug-free workplace or providing a non-smoking environment.
Core policies: There are many policies a handbook should address. At a minimum, include policies on attendance, dress code, harassment, basic conduct and electronic communications. This is only a short list to get you started.
Work information: Basic information on time and pay should be covered in your handbook. Payroll schedules, normal working hours for full-time employees, rules for part-time employees and approval processes for overtime pay for covered employees, for example, are important items to include.
Benefits: Explain any rules related to the benefits you offer employees, such as paid time off, unpaid leave or flexwork. For benefits run by outside providers (insurance plans or retirement funds, for example), list the provider and how the employee can get official plan documents.
Discipline: Outline the types of unacceptable conduct – violence, theft or repeated performance problems, for example – that can get employees in trouble, along with your company’s basic disciplinary process. Make sure to include a disclaimer that this is not an exhaustive list and that the employer reserves the right to discipline or fire any employee.
Complaint procedures: Employees need to know what procedures to follow to make and resolve complaints. Include a statement that there will be no retaliation against employees for filing complaints.

This list only covers what you should include at a minimum. Depending upon your location or industry, you may be required to include more notices, for example.

What to Avoid Putting in a Handbook

Most items you include in your handbook can protect you from lawsuits, although some items may invite them. Some courts have interpreted certain language often found in employee handbooks as creating a binding obligation for employers. When writing your handbook, avoid using absolute terms like “always” or “never,” especially in these three areas:

Promises of employment
Don’t address continued employment anywhere in your handbook. The biggest mistake employers make is saying employees will have a job as long as they follow the rules. In the past, courts have interpreted this as an employment contract, which prevents employers from firing workers without good cause. Every handbook should include a statement that employment is at-will and the company reserves the right to end employment for reasons not covered in the handbook or for no reason at all. Also, include a disclaimer that employment handbooks are guides, not contracts.
Disciplinary procedures
It’s important to list your disciplinary procedures – but don’t outline an entire process. If your handbook states that performance problems or misconduct will be handled by a verbal warning, then a written warning, followed by suspension, and, finally, termination, you are obligated to follow that process for every offense. Since some actions are worse than others, it’s important to keep your options open. You can do so by stating this is a standard process but management reserves the right to deal with issues on a case-by-case basis.
Policy changes
A policy may sound great in theory but be difficult to manage or put in practice. Give yourself some wiggle room to change any policies or benefits currently listed in the handbook by including a disclaimer that all information in the handbook is subject to change as the company deems appropriate or necessary.
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Jaime Lizotte
Hosted by Jaime Lizotte,
HR Solutions Manager
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