Employee Handbook Ultimate Guide (+ Free Template)
This article is part of a larger series on Hiring.
An employee handbook is a reference document for employees to learn about key company policies like benefits, dress code, and work schedules. It also covers employee rules and expected behaviors.
For business owners, maintaining an up-to-date employee handbook ensures that employees always have access to accurate companywide information regardless of their manager or department. Likewise, a comprehensive handbook can help supervisors manage employees more consistently.
Free Downloadable Employee Handbook Template
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Onboard new hires in 90 seconds with Rippling. You can simplify the process by having your employees review and electronically sign your employee handbook, I-9, W4 and offer letter within the software.
Rippling also provides full-service payroll in all 50 states, benefits administration, and time & attendance built-in.
Disclaimer: This employee handbook template is provided as a general guide and is not intended to provide specific legal advice. We strongly recommend having the template reviewed by legal counsel to ensure compliance with all relevant federal and state labor laws.
Using an employee handbook template for small businesses can simplify the process of creating your own while ensuring that you include all the necessary sections. You can also use a dedicated employee handbook builder or work with your current HR services provider to draft a handbook that fits your needs.
Our free downloadable employee handbook sample was created by one of our in-house HR experts and covers policies all businesses should consider for their own handbook. We picked these sections because they’re valid for small business owners in all 50 US states.
Keep in mind, however, that the template doesn’t cover all of your business’s unique policies. What’s more, it may not be in-depth enough to meet certain state requirements, like mandated sick leave or Equal Employment Opportunity (EEO) protected classes (e.g., sexual orientation or identity). Before you finalize your handbook, check local laws—like those governing sexual harassment—to make sure your handbook is complete.
If you’d prefer to use a payroll and HR software that makes it quick and easy to create and manage all of your policies, consider Rippling. Rippling lets you easily manage your employees’ payroll, benefits, expenses, devices, apps, and more all in one place. Plus, when you sign up for Rippling before December 1, 2023, your first month will be free.
Sections to Include in Your Employee Handbook
There are several sections that business owners should include in their employee handbooks. For example, make sure the handbook addresses corporate culture and important legal documents—like nondisclosure agreements and policies—that will protect you and your employees.
When drafting an employee handbook, consider including these sections:
- Introduction to Company and Values: Use the beginning of the employee handbook to share your company’s mission statement, as well as why and how you were founded.
- Touch on Company Culture: Company culture is an expression of a business’s personality and atmosphere. Use the employee handbook as an opportunity to describe the leadership style, mission, values, and other elements of the company’s identity.
- Nondisclosure Agreement: A nondisclosure agreement (NDA)—or confidentiality agreement—protects a business’s proprietary information by limiting the information an employee can share with others.
- Anti-Discrimination Policy: This portion of an employee handbook helps you comply with federal labor laws that aim to prevent discrimination in the workplace. Use a portion of your company’s employee handbook to outline relevant federal anti-discrimination policies, as well as any additional requirements imposed by state law.
- Compensation and Benefits: An employee handbook is an excellent place to detail how the company pays employees, how frequently, and on what day(s) of the month. From here, you can also go into detail about additional perks, like flextime, commuter benefits, and health insurance.
- General Employment Information: This section should clearly define a company’s probationary period (where applicable) and the steps that should be taken if an employee wants to quit. Use this section to detail the concept of at-will employment as well. If your company hires at-will employees, you or the employee is free to terminate the employment relationship at any time and for any reason.
- Computer and Technology Policy: Use your employee handbook to spell out your rights as an employer to view and access electronic documents and company electronics like computers. This is also a good place to establish a policy for updating passwords, provide tips for keeping passwords secure, and clarify your cellphone usage policy.
- Leave Policies: Let employees know what your paid time off, sick leave, parental leave, and other leave policies are and when they apply. This is also a good place to list company holidays and define the jury duty policy.
- Progressive Discipline Policy: For the business owner, this is a good section to define steps that will be taken under the company’s progressive discipline policy. It should also clearly identify prohibited behaviors and include a reminder that at-will employment remains in effect, regardless of the discipline policy.
- Signature: The signature section of an employee handbook verifies that the employee received a copy of the document, read it, and understood it. This step makes the employee take it more seriously and may help as a defense in case of a wrongful termination lawsuit. Services like LegalZoom can help you draft an employee handbook acknowledgment form.
Depending on the nature of your business, it may also make sense to include some or all of the following sections:
- Attendance policies
- Expense reimbursement procedures
- Alcohol, weapons, and drug policies
- Dress code
- Remote work guidelines
Compliance Note: Companies have often used noncompete agreements to restrict an employee from going to work for a competitor. However, states have begun placing restrictions on the use of noncompete agreements and, in May 2023, the General Counsel for the National Labor Relations Board (NLRB) issued a memo stating that noncompete agreements violate workers’ rights under US labor law. While they are still allowed, our template does not contain a noncompete clause. It does contain language, though, that prohibits employees from intentionally damaging an employer’s reputation or competing with the company’s interests during employment.
Legal Considerations When Creating an Employee Handbook
In addition to keeping your company’s employee handbook relevant by including content that’s tailored to your business’s size, location, and culture, consider these legal factors.
Compliance Note: In our increasingly digital and remote work environment, it’s crucial to remember that employment laws applicable to an employee are typically determined by where the employee is located rather than where your office is located or where your business is registered. This means your handbook must cater to the laws of various jurisdictions if you have remote employees spread across multiple states and cities.
Where to Get an Employee Handbook
Before you start developing an employee handbook from scratch, consider that you may already be working with a provider that can offer you an employee handbook sample, like our free employee handbook template.
Employee Handbook Costs
Creating an employee handbook for your company may involve working with in-house HR professionals, a consultant, or an attorney specializing in employment. There are also annual costs associated with the maintenance of an employee handbook, but they are worth it because your employees will have access to the most up-to-date resources.
You may encounter these common costs and services when drafting an employee handbook:
Outsourced HR Services
If you don’t have an in-house HR team, HR firms and attorneys can create a customized employee handbook. By hiring a third party that specializes in human resources and employee communications, you can protect yourself from problems that can result from a vague, incomplete, or misleading employee handbook. Depending on your needs and location, you could pay up to $5,000 for this service.
Legal Review
Employee handbooks that are written by business owners or HR professionals may benefit from legal review. This type of review can ensure compliance with relevant employment law and protect business owners in case of an employee lawsuit. However, an attorney may charge hundreds of dollars an hour—especially in a large market. If you don’t want to hire an attorney, companies like LegalZoom offer packages that make it easy to create a handbook by answering a few simple questions. The Standard Plan starts at $35 per month, and LegalZoom’s specialists can also review documents for compliance.
Maintenance
In addition to drafting an employee handbook, commit time every year to updating the document to reflect current policies and legal requirements. Then, have your lawyer review the updated version, and schedule employee training to make sure everyone is on the same page. Again, if you don’t want to incur legal fees, consider a monthly membership like the one available through LegalZoom.
Importance of Employee Handbook Annual Audits
Let’s take a moment to emphasize a crucial practice: the annual handbook review. Just like a car needs regular maintenance to run smoothly, your employee handbook also requires periodic checkups to ensure it’s up to date and compliant with ever-changing labor laws.
Conducting an annual audit of your handbook should focus on a few key areas:
- Legal Compliance: Law and regulations related to employment are frequently updated and vary from state to state, and even between cities. An HR consultant will help keep you updated as laws change, but if you’re doing updates yourself, your annual review is a good time to make any legal changes.
- Company Changes: As your business grows and evolves, so do its policies and procedures. An annual audit allows you to update the handbook to reflect new strategies, technologies, or changes in your company.
- Employee Expectations: A current handbook helps set clear expectations for employees about their roles, rights, and responsibilities. It also provides them with current information on company policies and procedures.
- Consistent Enforcement: Regular updates ensure that managers across your organization have the same information, promoting consistency in policy enforcement.
- Risk Management: A well-maintained handbook can protect your business against employee lawsuits and claims, like wrongful termination, harassment, and discrimination.
Employee Handbook Frequently Asked Questions (FAQs)
Here is a suggested communication process when updates are made to the employee handbook:
- Announcement: Announce that an update has been made to the handbook. This can be done in a staff meeting, through email, or via the company intranet.
- Summary of Changes: Provide a summary of the changes in a format that’s easy to understand. Highlight the key points so that employees can quickly grasp what’s new or different.
- Make It Accessible: Ensure that the updated handbook is easily accessible to all employees. If it’s a digital handbook, provide a link. If it’s a physical book, make sure new copies are distributed.
- Acknowledgment of Receipt: Ask employees to sign an acknowledgment that they’ve received, read, and understood the new policies. This could be a digital confirmation or a signed paper form.
- Q&A Session: Consider hosting a Q&A session where employees can ask questions about the updates. This can be done in a town hall format, or digitally via a chat or forum.
- Reminders: Regularly remind employees about the handbook and its updates, especially the critical ones, so they remain top-of-mind.
Remember, communication should be clear, open, and two-way. Encourage employees to ask questions if they’re unsure about any changes.
Accessibility is crucial when creating and distributing an employee handbook. Here’s how you can ensure it:
- Language Translation: If you have a diverse workforce that speaks multiple languages, consider translating your handbook into those languages. This ensures everyone understands the policies and guidelines.
- Accessible Formats: For individuals with disabilities, provide the handbook in accessible formats. This could include large print versions, audio recordings, or digital versions compatible with screen readers for visually impaired employees.
- Online Accessibility: If your handbook is available online, ensure the website or platform is accessible. Use alt text for images, provide transcripts for videos, and make sure the site is navigable using only a keyboard.
The handbook should be detailed enough to provide clear guidance but not so detailed that it becomes overwhelming. It should cover all essential areas like company policies, behavioral expectations, benefits, leave policies, and procedures for reporting issues. However, avoid going into excessive detail that might be better suited for separate, more specific policy documents or procedural manuals.
Your handbook is not just a set of rules; it’s also a reflection of your company’s culture and values. Here’s how you can incorporate them:
- Mission and Vision: Start with your company’s mission and vision statements. These provide a clear picture of your company’s purpose and goals.
- Company Values: Outline your company’s core values and explain what they mean in practice.
- Work Environment: Describe what it’s like to work at your company. Highlight aspects like collaboration, innovation, work-life balance, diversity and inclusion, etc.
- Employee Benefits and Perks: Showcase the benefits and perks that make your company a great place to work.
- Success Stories: Include stories of employees who embody your company’s values. This brings your culture to life in a relatable way.
Remember, your employee handbook should feel like a guide to being part of your team, not just a rulebook.
Bottom Line
Employee handbooks are an important way to protect business owners while helping employees understand company culture, job expectations, and current policies. Having a good handbook can save you time, money, and headaches in answering employees’ questions. What’s more, a well-written handbook can serve as a defense in case of a wrongful termination lawsuit.
To create a simple and effective employee handbook, consider using our free template as a starting point. If you’d prefer to use a payroll and HR software that makes it quick and easy to create and manage all of your policies, consider using Rippling. Rippling lets you easily manage your employees’ payroll, benefits, expenses, devices, apps & more all in one place. Plus, when you sign up for Rippling before December 1, 2023, your first month will be free.
