What is an employee handbook?

An employee handbook is a written guide that outlines a company’s policies, expectations and procedures, helping employees understand how the workplace operates and what’s expected of them. Many employee handbooks incorporate federal and state employment policies alongside company-specific rules, outlining both employees’ rights and employers’ expectations.

Employee handbooks are ever-evolving documents that are regularly updated to reflect changes in industry regulations, labor laws or company policies. Some organizations provide a physical, printed book for their employees to keep, while others maintain their employee handbook in digital form.

It’s a good policy to ask employees to sign an acknowledgment form confirming they’ve reviewed the handbook and understand the company’s policies.

Reasons to create an employee handbook

Drafting an effective employee handbook requires effort, but it’s a worthwhile investment for a business. Here are some reasons to create an employee handbook:

• New employee support: Helps new employees quickly learn what they need to know about a company so they can integrate easily into the environment.
• Clear communication of expectations: Helps employees clearly know what is expected regarding conduct, attendance, performance and workplace behavior.
• Education: Familiarizes employees with legal regulations, their rights and the policies established to create a safe, productive workplace.
• Documentation of policies: Creates a written record of which company policies are communicated to employees.
• Consistency: Puts all policies in writing, which helps establish clear expectations for employees, reducing confusion and supporting fair treatment.
• Easier enforcement: Helps support potentially needed disciplinary actions. The employee’s signature on the handbook receipt form indicates that they have access to information on expected behavior.
• Support for managers: Helps supervisors answer policy-related questions or address workplace issues.
• Compliance: Creates policies that align with applicable regulations, supporting compliance. It also provides employees with the information they need to comply with those regulations.

How to distribute an employee handbook

New hires typically receive a copy of the employee handbook on their first day of work during onboarding. Employee training often includes reviewing the employee handbook so the newest team members are aware of essential information. In some cases, employers might send new hires the employee handbook before their first day so a new hire can review it independently and ask questions on their first day.

What to consider including in an employee handbook

Employee handbooks can cover a wide range of HR policies and guidelines. These are common items to consider including:

Introduction and overview

Most employee handbooks begin with an introduction to the company and the handbook itself. This overview covers what the employee can expect to find inside. Common subsections for the introduction include:

• Handbook’s purpose
• CEO’s welcome
• Company information

Conduct

The handbook sets expectations for employee conduct, both while at work and when representing the company outside the workplace. A well-written conduct policy helps demonstrate a company’s values and can contribute to a positive work environment. When writing a conduct section for a handbook, consider including the following:

• Code of conduct
• Non-solicitation policy
• Anti-harassment and anti-discrimination policy
• Workplace violence prevention policy
• Drug and alcohol use policy
• Dress code and grooming standards
• Confidentiality and data protection rules
• Social media and public communications policy
• Noncompete agreements (where permitted by state law and subject to strict limitations)
• Conflict of interest policy

Employment relationship

This section of an employee handbook often explains the legal nature of the working relationship, including whether the company uses an at-will employment model. At-will employment generally means that either the employer or the employee may end the employment relationship at any time, with or without notice or cause, provided the reason is not unlawful.

As the rules and limitations around at-will employment can vary by state and may be affected by contracts, policies or local laws, employers are encouraged to review applicable state requirements before relying on at-will language.

Consider including employee-relationship policies, such as:

• Employer and employee confidentiality agreement
• Noncompete agreement
• At-will employment
• Employee acknowledgment

General employment information

The general employment information section of an employee handbook often includes subsections that explain the day-to-day functions of the workplace and special supports available for employees. Common subsections include:

• Equal employment opportunity policy
• Promotions
• Expenses and reimbursements
• Special accommodations
• Employment of relatives
• Personnel file policy
• Harassment and discrimination
• Fraternization
• Workers’ compensation

Attendance

Work hours can vary by industry and expectations. Employers can define work hours and other attendance-related policies in their handbook. These are some details to include in this section:

• Exempt vs. nonexempt employees
• Work hours and overtime
• Meal and rest break policies
• Exceptions
• Weather
• Remote work
• Consequences of tardiness or no-shows
• Termination due to inability to work

Professionalism

The professionalism section of an employee handbook explains expectations for behavior in the workplace and when representing the company outside the office. Some companies create a separate professionalism section, while others add this information to the conduct section. Here are some examples of items that may be included:

• Dress code
• Smoking policy
• Drugs and alcohol policy
• Violence in the workplace
• Weapons
• Security
• Parking
• Visitors in the workplace
• Conflicts of interest
• Giving and receiving gifts

Compensation and benefits

This section of the employee handbook describes the general compensation package and benefits available to all company employees. It doesn’t provide individual employees with their specific compensation package details. Instead, it explains what is generally available to everyone. Some items to consider include:

• Payroll schedule
• Time tracking
• Benefits eligibility
• Health insurance
• Dental insurance
• Vision insurance
• Life insurance
• Disability insurance
• Continuation of health coverage (COBRA)
• Retirement benefits
• Bonuses
• Workers’ compensation
• Unemployment assistance
• Educational assistance
• Employee assistance program
• Paid legal aid
• Supplemental insurance
• Stock options
• Employee discounts

Time off

The time off section outlines when employees may take time off and the proper procedures for requesting both paid and unpaid leave. In addition to outlining company-specific policies, it’s important to account for state and local laws that may mandate certain types of leave.

For example, some states may require employers to provide paid sick leave, family and medical leave or time off for jury duty, voting or school-related events. Verifying that a handbook reflects these jurisdiction-specific obligations can help keep a business compliant and provide clarity for the team.

Common subsections include:

• Paid holidays
• Paid time off
• Vacation policy
• Sick leave policy
• Attendance policy
• Family and Medical Leave Act (FMLA)
• Bereavement leave
• Jury duty
• Military leave

Acceptable use

Many employees use company property, such as computers, phones and internet access to perform their duties. The acceptable use section of the employee handbook clearly outlines expectations and limitations on how these resources may be used, including guidance on issues such as:

• Telephone use
• Cell phone use
• Company electronics and equipment use
• Use of company motor vehicles
• Computer and internet use
• Social media and blogging policy

Employee monitoring

Some companies may monitor electronic devices or workspaces. Companies that do this may consider including a section detailing how they monitor work and what employees can expect.

Subsections might include:

• Digital surveillance
• Audio surveillance
• Physical surveillance

Performance expectations

The performance expectations section of the employee handbook describes how the company evaluates performance, promotes professional development and manages infractions related to performance or interactions with others.

Consider these additions to the performance expectation section:

• Professional development
• Attendance and punctuality standards
• Employee performance
• Coaching and performance improvement plans (PIPs)
• Progressive discipline steps
• Documentation of performance issues
• Discipline
• Conflict resolution
• Team collaboration and accountability expectations
• Formal complaints

Exit policy

The exit policy section of the manual explains how employees can terminate their employment and outlines the expectations and procedures for leaving the company. Companies may consider including these pieces of information in their handbook:

• Voluntary resignation procedures and notice expectations
• Exit interviews
• Return of company property
• Ongoing obligations, such as confidentiality requirements
• Continuation of benefits information, if applicable
• Final paycheck timing and accrued time off policies
• Retirement policies

Tips for writing an effective employee handbook

Employee handbooks are comprehensive documents that benefit from regular review and updating. These tips can help with writing and maintaining an employee handbook:

Use a template

Employee handbook templates are available online to assist with the initial drafting process. These templates can be customized to fit specific organizational needs, ensuring policies are accurate and the language reflects the company’s brand.

Have it reviewed

Creating a handbook allows a company to tailor the document to its specific needs, though this does not automatically ensure compliance with all legal requirements. Having a legal professional review a draft can help address important topics related to state and federal regulations.

This review can help avoid ambiguous language that could lead to legal issues. Consulting a lawyer with expertise in employment law can help verify that a handbook is accurate and comprehensive.

Make it a part of onboarding

Integrate the employee handbook into the onboarding process. Encourage new hires to take note of sections that are highly relevant to them or any questions they may have.

Obtain signatures

Having all employees sign an acknowledgment of receipt after reading the employee handbook can help an employer demonstrate that staff members had access to the policies if misconduct occurs. This receipt can be kept in the employee’s personnel file so that if an individual claims they were unaware of a certain policy, management can remind them that they received it in writing.

Review it regularly

Employers can establish a schedule to review an employee handbook regularly. At least one review per year is often appropriate for most businesses. Employee handbooks may be reviewed more often or outside of a typical review schedule if a business experiences significant changes, such as large employee turnover or rapid growth. A human resources team may assist with the review and restructuring of the employee handbook.

Create a digital copy

While organizations might provide a hard copy of the employee handbook to new hires, they may also choose to offer a digital copy instead. This approach eliminates the need to reprint physical copies for every employee when updates are made. Employers can ensure all team members have access to the digital version and know where to locate it.

Use approachable language

An employee handbook can be made more accessible to readers by using clear, everyday language instead of complicated legal or business jargon. Using approachable language helps employees easily understand the information while still maintaining accuracy.

Include disclaimers

Including clear disclaimers in an employee handbook is an important risk-management step. A common provision to include explains that the handbook is intended as a guide to workplace policies and does not create a binding employment contract. Employers often state that policies may be revised, updated or withdrawn at the company’s discretion to reflect operational needs or changes in laws or regulations.

The content contained in this article is for informational purposes only. It is not legal advice and should not be construed as such. The decision to draft, implement or maintain an employee handbook is solely up to a company and Indeed makes no representation or warranty as to whether doing so is necessary, proper or legally advisable. The contents of an employee handbook used by a company should be reviewed by such company’s legal counsel for compliance with federal, state and local laws, as Indeed makes no representation or warranty as to the accuracy or completeness of the content contained in this article.