November 9, 2021
Employee Handbook Basics: Why It’s Important & How to Create One

As a new or growing business owner, you may be surprised to learn that no federal or state laws mandate employers to have an employee handbook. But as we often say, just because you’re not required to do something doesn’t mean you should overlook it!

Instituting an employee handbook is always a good idea and best practice for employers of all sizes and across all industries. This crucial document helps keep things clean and organized and also reduces risk. Read on to find out why your organization needs a handbook and how to create one. 

Why Your Company Needs an Employee Handbook

Having a thorough, up-to-date handbook can save time and stress and mitigate your company’s liability.

Delivering Required Notices

Many laws require employers to notify employees of certain workplace rights in writing, such as equal employment opportunity (EEO) statements. A handbook serves as an organized, easily accessible document containing all of these mandatory written notices. Plus, it saves your HR team the hassle of tracking whether or not each employee receives every individual notice.

Saving Time

An employee handbook answers a lot of routine questions and concerns that employees would normally have, meaning HR won’t have to answer the same basic questions and requests over and over again. 

Protecting the Organization

Outdated or inaccurate policies can be as risky as having no policies! Ensuring all policies in your handbook are legally compliant and updated regularly allows you to protect your organization if your policies or practices are challenged in court.

How to Create an Employee Handbook

Are you developing a new employee handbook? Or does your current document need an overhaul? Follow these seven steps.

1. Review and update all current company policies

Start by reviewing all of your policies or analyzing gaps where new policies may be necessary. Once you develop or make changes to individual policies, always have your legal counsel review them. 

The Society of Human Resource Management (SHRM) encourages employers to remember the National Labor Relations Board (NLRB) guidance when creating new policies. Avoid being too broad when it comes to confidentiality and conduct rules. Specifically, steer clear of: 

  • Language preventing employees from discussing protected concerted activities (e.g., wages): Instead of stating, “Employees may not discuss customer or employee information outside of work, including phone numbers and addresses,” you might write, “Misuse or unauthorized disclosure of confidential information not otherwise available to persons or firms outside [Company Name] is cause for disciplinary action, including termination.”
  • Conduct rules that are too general: Instead of “Be respectful of others and the company” (which could be interpreted as restricting criticism of the company, another protected concerted activity), your handbook could state, “Being insubordinate, threatening, intimidating, or disrespectful to or assaulting a manager, supervisor, co-worker, customer, or vendor will result in discipline.”

Another area for employers to tread lightly is their social media policies, which should set similar expectations without interfering with a worker’s protected right to concerted activity. 

2. Outline the employee handbook

Determine the essential items and information that should go in your employee handbook. These generally include:

  • Mission statement
  • EEO statement
  • Contractual disclaimer
  • At-will employment statement (where permitted)
  • Purpose of the handbook
  • Brief company background 

Also consider federal and state laws on:

  • Family and Medical Leave Act (FMLA)
  • Equal Employment Opportunity Commission (EEOC)
  • Anti-discrimination laws
  • Americans with Disabilities Act (ADA)
  • Fair Labor Standards Act (FLSA)

Omitting these required written notices from the handbook could lead to confusion and noncompliance. Including them all in one document will ensure compliance.

3. Summarize each policy and procedure

Include a summarized version of each policy and procedure in a style that all employees can easily read and understand without legal language. Put these summaries before the specific rules or policies for each topic.

4. Make it a team effort

Organize and review the employee handbook with your HR department and/or a project team. Getting a few different perspectives will help ensure the document is accurate and easy to understand.

5. Consult your attorney

Always have your company’s legal team review the complete handbook to ensure all policies and practices are compliant with employment laws and do not contain any statements that may create contractual agreements.

6. Distribute handbooks

Establish a routine and method for distributing the handbook to all team members. An ideal time to do this is during new employee orientation. You can also conduct a company-wide manual distribution whenever your handbook is updated. 

Of course, employers can also use electronic methods, such as email or the company intranet. Just note that you must provide physical copies to employees who don’t have internet access or when an employee requests it. Electronic delivery is convenient when you make changes and need to share the new version with everyone.

7. Update your handbook regularly

Appoint a person (typically an HR professional) to be in charge of updating the handbook when employment laws or internal policies change. A best practice is to perform a complete employee handbook review and update annually to keep up with the state, local, and federal laws. This yearly assessment is also vital to ensure that all policies remain relevant and adhered to throughout the organization.

Develop & Review Your Employee Handbook

Are you ready to develop or update your employee handbook but feeling overwhelmed by the process? Partner with a team of HR professionals who have experience working with organizations in various industries and locations. We’ll take the handbook stress off your plate and ensure both your employees and your company are protected. Contact BlueLion at 603-818-4131 or to find out how we can help today!

The information on this website, including its newsletters, is not, nor is it intended to be legal advice. You should contact an attorney or HR specialist for advice on your individual situation.