A man stands in an aircraft hanger next to a cylindrical airplane engine and reads a book. The man is bearded and wears a black vest over a gray plaid shirt. He also wears safety goggles and, around his neck, a pair of orange headphones. The airplane engine has part of its cover removed, showing the complex mechanisms inside.
Making your employee handbook available in multiple formats ensures that employees can access it whenever and wherever they need to. — Getty Images/EXTREME-PHOTOGRAPHER

An employee handbook is given to new employees as a tool to relay detailed information about their job and the company. The handbook serves as an easily accessible guide about the company’s policies, values, mission, procedures, and benefits, all laid out in one central location.

Here’s how and why to write an effective employee handbook for your business.

Why does having an employee handbook matter?

Whether you have only a few employees or a few hundred, it’s important to have a single source of information about how those employees are expected to behave and perform at your company. Without a clear understanding of expectations or policies for handling certain workplace situations, you may find yourself dealing with some unexpected snafus — legal or otherwise.

An employee handbook is also a great place to include any employment notices mandated by federal or state agencies, such as workers' compensation information.

[Read more: Employee Handbook Templates for Your Small Business]

What to include in an employee handbook

An employee handbook can be as unique as the business that creates it, but there are a few basics every handbook should cover:

  • Must-have policies. Federal and state laws that pertain to employees should be front and center in an employee handbook. Such laws include the Family and Medical Leave Act (FMLA), the Equal Employment Opportunity Commission (EEOC), the Americans with Disabilities Act (ADA), and the Fair Labor Standards Act (FLSA). Include these laws as well as at-will employment statements, anti-harassment policies, and nondiscrimination policies in your handbook so confusion or noncompliance does not become an issue in the future.
  • Employee benefits. The benefits listed in this section should include information on your company’s health care, vision, and dental policies, as well as insurance eligibility requirements. Additional benefits to include are paid time off (PTO), holiday schedule, and workers’ compensation.
  • Timely updates. In today’s landscape, it may be a good idea to include policies and updates relating to unforeseen circumstances, such as the COVID-19 pandemic. Perhaps these updates relate to specific guidelines to follow, workplace safety requirements, and hybrid or remote work policies.
  • Job-specific dress codes/grooming policies. Employers may want to include any policies directly relating to dress and grooming if it relates to a safety requirement of the job they were hired to do. These requirements should be free of discrimination, and companies should have modifications in place relating to an employee’s religious beliefs.

As laws change, so do your company’s policies and expectations.

Tips for writing an employee handbook

Keep it simple

An employee handbook helps employees understand their company and what is expected of them during their employment. Use straightforward language so it's easy for employees to understand. The language doesn’t have to be formal or use legalese to be an important document that employees take seriously.

Include legal issues

Consult with a lawyer to include material regarding equal employment and nondiscrimination laws. The legal issues included in your employee handbook are your company’s “official stand,” and employees can use the handbook against you if something is incorrect and they want to file a lawsuit.

[Read more: 10 Legal Requirements for Hiring Employees]

Review it regularly

As laws change, so do your company’s policies and expectations. A thorough review of the employee handbook is helpful so your business — and employees — are working under current parameters. Since policies from the state and federal levels are included within your employee handbook, hire a lawyer to regularly review the material to ensure your company is following current federal and state regulations.

Utilize a different format

Although you may have hard copies printed of your employee handbook to give new hires on their first day, make it digitally accessible as well. This eliminates anyone claiming they couldn’t find it and didn’t know what the proper protocol is. It also gives you the flexibility to regularly update the document. In conjunction with having a digital format, employee handbooks can look colorful and include pictures for employee engagement.

Use it to open communication

You can use your employee handbook as a communication tool for difficult discussions. If an employee is not performing the way they are expected to, a conversation using the employee handbook — where expectations are clearly outlined — can be helpful to show the employee that certain behavior is expected of all employees. Although the handbook is there to guide employees, make it clear that anything within the handbook can always be questioned and further clarified if it is not understood by an employee.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.

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