Creating an Employee Handbook from Scratch

August 31, 20158:10 am1201 views

As the company expands, HR professionals have to create an employee handbook from scratch. It is our job to write down policies and rules that govern our employees. An employee handbook is usually sensible, practical, and protects you as an employer.

For one thing, codifying policies in a handbook gives you a measure of legal protection in the event that an employee sues you for wrongful termination, harassment, or illegal discrimination. Plus, if you formulate your employment policies with a progressive, employee-friendly cast, they can be powerful tools for recruiting and maintaining morale.

Thus, we have to put company policies in writing (some of us probably need to create it from scratch). Nevertheless, there are several tips to assemble an employee handbook:

1. Concern on the whole thing

The tradeoff at the center of any employment manual pits consistency against flexibility. Codifying policies and then following them consistently will generally help protect you against lawsuits. But there are legal and necessary kinds of discrimination–between productive and unproductive workers, for example–and your manual shouldn’t be so rigid or specific that it limits your ability to make such distinctions.

How to strike the right balance? Emphasise in the handbook’s introduction that these are merely general guidelines. And throughout, avoid language that locks you into a course of action–for example, use we may instead of we will.

Preserve the “at will” relationship

Most states define employment as “at will,” which means that either party may end the relationship without notice, for any reason or no reason at all. In practice, case law has put limits on that blanket discretion.

More to the point, courts have in some cases decided that statements made in employee handbooks amount to a contract that limits the employer’s at-will prerogative. So it’s crucial that nothing can be construed as a contract or promise. In fact, make that disclaimer explicit early. Avoid expressions such as “permanent employee,” “probation,” and “introductory period.” Also, be sure to state that you’re entitled to change the policies at your sole discretion.

2. Ensure it is legal

The relationship between employer and employee is governed by more laws than you probably realise. Some even apply to businesses with just a single employee. So even the most basic employee handbook needs to reflect the most important of those laws. You can get specific language appropriate for your business and location from an HR consultant or lawyer, or from the software listed in “Resources” at the end of this Guidebook. These three categories are among the most important:

Harassment and discrimination

In general, these statements should do four things: one, affirm that you are an equal opportunity employer in every respect; two, make plain that you do not tolerate harassment or illegal discrimination and outline the steps an employee can make to report violations (theoretically, two people should be designated to receive these reports); three, describe the steps your company will take in response to discrimination or harassment claims; and four, make it clear that an employee who makes a complaint will not face retaliation.

Wage and hour issues

Identify, as generally as possible, the days and hours of the work week as well as the rules for breaks and meals. Because salaried employees are typically exempt from laws, that, among other things, mandate overtime pay for hourly workers, you should establish guidelines for determining which employees fall into which categories. Specify the overtime formula. This is also the place to define full-time, part-time, and temporary employment if you want to distinguish employees who are eligible for benefits from those who are not.


Companies that operate in potentially dangerous work environments should detail a safety policy that accords with state and federal regulations. Indeed, your state may have other laws that require a policy statement; check with an employment attorney or your state’s department of labour.

See: Top 7 Must-Haves in Company HR Policy

3. Situate the law

Here’s the place to cover basic guidelines for employee behaviour. Among the issues you may want to address are attendance and tardiness; a dress code; personal use of the phone, the Internet, and e-mail; and confidentiality. You might also detail a drug and alcohol policy, including notice about testing.

The case for limited rules

As companies grow, they tend to adopt ever more policies as circumstances demand. These policies can cover topics such as wearing perfume in the office and what can be posted on the break room bulletin board. But many HR advisers argue for restraint, noting that heavy-handed rules can undermine an otherwise healthy corporate culture. Focus on the company’s core needs and regulate just those behaviours that are most incompatible with those needs.

The case against threats

Similarly, resist repeatedly reminding employees of the punishment they face for each infraction, which is a strategy employers often use to avoid paying unemployment benefits to a fired worker. A handbook should be considered as a good-news document. In fact, few employers confront the worst-case scenarios they write rules for – and when they do, the conduct tends to be so egregious that an explicit rule isn’t necessary. Aim to lay out the discipline procedure in general terms; for guidelines, see “Detailing Discipline.”

4. Explain the benefits

Several laws require you to provide certain benefits, such as the federal Family and Medical Leave Act. You will also have to allow for jury duty and workers’ comp leave.

Voluntary benefits

These, of course, depend on the state of the labour market and the sort of corporate culture you aim to create. Besides insurance and retirement accounts, these can include employee assistance programs (wellness programs, say, or substance abuse or other counseling) and family and bereavement leaves.

Marking time off

More companies are abandoning separate vacation and sick leave policies for combined “paid time off to discourage employees from taking unused sick days at the end of the year.

5. Put the responsibility on employees

Every company should require employees to acknowledge with a signed document that they have received and read the handbook, and that they will seek clarification about any unclear aspect. Some acknowledgements go further and seek written authorization for other legal protection measures, like annual credit checks or drug testing. Indeed, it can be a great opportunity to reduce your liability.

The Common Mistake

Many companies make the mistake of putting a formal “progressive discipline” policy in writing: A first infraction gets a verbal warning; the next one gets a written warning; the next, perhaps a brief suspension; and only then termination. The problem is that codifying that process can obligate you to do things that you don’t always want to do.

You might want to cut a trusted, longstanding employee some slack even after a flagrant infraction, for example, or immediately fire an underperformer for a relatively minor one. And formal progressive discipline policies can undercut your “at-will” status in the eyes of a court.

The Better Option

Write a policy that focuses on encouraging positive behaviours and avoids threats. Begin by articulating the expectation that employees will practice self-discipline and meet performance goals. Then explain that, in the unlikely event that an employee fails to meet those standards, the organisation will provide the coaching, counseling, and, in some cases, discipline necessary to assist the employee.

In short, tell your employees that your goal is to help them succeed, not fire them. As always, the tradeoff for this flexibility is a potentially weaker defense in the courtroom when you are contesting discrimination or wrongful termination suits. Your feel for your corporate culture will determine whether it is a tradeoff worth making.

See also: Update Your HR Manual with These 8 Additions

Source: Inc

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