Key Elements to Include in Employee Handbook Policy

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Priyanka Prashob
Priyanka Prashob is an organizational psychologist with 6+ years of experience in the field of Content and Psychology. She is a passionate writer and has authored 2 books. She has designed content for corporate training programs, worked on organizational behavior reports and numerous individual personality assessment reports. Several research articles written by her are published on platforms like Academia and Research Gate. The articles have gained recognition and appreciation from universities, academicians, and researchers across the world.

Employee handbook policy is a valuable source of communication for both the – employer and the employee. It provides guidance and information related to the organization’s history, values, mission-vision, policies, procedures, and benefits in a written format. Most importantly, they protect the employer against unfair treatment claims and cover the organization in case of any legal issues down the line. According to Gusto’s research, 87% of small businesses sized 10-200 have employee handbooks.

What’s the purpose of an employee handbook policy?

An employee handbook policy sets clear expectations for new employees, provides them a roadmap to follow and rules to abide by. Your employee handbook policy should cover everything from dress code and vacation days to your code of conduct and non-discrimination policies. In addition, your employee handbook should give a clear picture of your company culture and set a tone for what it’s like to work at your company. For instance, if you are okay with your employees wearing casuals on Fridays, then this must definitely go into your employee handbook. Or, if your company organizes parties/games at the end of every month to ensure your employees have the fun-time they need – then make sure to mention this in your handbook!

From keeping your company compliant to creating a seamless onboarding experience for new hires, employee handbooks sure play a critical role. Let’s look into the key elements to include in your employee handbook policy.

10 Elements to include in your employee handbook policy

1. Company values, mission, and vision

To help your new hires understand what your company is like – this section is a must! Describe your company’s story – who found it, why, and how? Also, include your company mission and vision statement along with the values your company cherishes the most. This will give your new hires, a picture of your company culture. Most importantly, pen down why your company matters, and why your new hires should be excited to be apart of it!

2. Company code of conduct

In this section, you need to give your employees a general overview of information regarding ethics and compliance. In other words, jot down what your company sees as acceptable and unacceptable behaviors at the workplace. Cover policies around areas such as,  

  • Dress codes
  • Use of phones, email, and internet during working hours
  • Snack/lunch breaks and rest periods
  • Smoking, alcohol, and substance abuse guidelines
  • Data management and customer privacy
  • Conflict resolution policy
  • Customer or vendor gifts (in any form) or bribes
  • Ethical standards and policies
  • Safeguarding confidential information

Also, make sure to address any disciplinary procedures you have in place relating to employee behavior in the workplace. Basically, the code of conduct policy should emphasize your company’s values, and the desired behavior you wish to foster in your workplace. 

3. Equal employment and non-discrimination policy

You’re required by law to explicitly state that your business adheres to non-discrimination and equal employment opportunity laws in hiring and promotion, in accordance with the Equal Employment Opportunity Commission (EEOC).

In addition, you also have to address and comply with, the Immigration and Nationality Act (INA), which prohibits unfair hiring, firing, promotion, and recruitment practices related to an employee’s citizenship status, national origin, and eligibility verification process. The law also outlines redress for retaliation and intimidation.

Mentioning this policy in your employee handbook will outline the consequences of discriminatory behavior and sends out a serious message that your organization won’t tolerate discrimination or harassment of any kind. And that employees who are found to indulge in such practices will face serious consequences. 

4. Desktop/laptop and technology policy

It’s also important to list out what your employees can and can’t do with the technology you provide them. You may include things like, whether,

  • Your company has the right to see emails they send on company computers
  • You expect them to avoid social media while on their work computer, and 
  • How much privacy they should expect while using company property

In addition, also list out the policies with regard to office computer/desktop/laptop usage and the consequences for violating any of the mentioned terms.

5. Compensation and benefits policy

In this section, list out the compensation that you offer your employees along with the benefit plans that your employees are entitled to receive – in detail. For instance, it may include a break-up of healthcare insurance plans, accommodation or travel reimbursement plans, bonuses, profit sharing policies, etc.  

Also, include vital information regarding salary, payroll deductions, and compensation increases in case of a promotion, etc.

Also Read: Advantages of Having a Work-From-Home Policy

6. Appointment, probation, and termination policy

In this section, include everything relating to your company’s appointment, probationary period, and termination policies. For instance: Let your new hires know whether they need to wait to receive their benefits and if yes – how long they need to wait. And what process they need to follow in case they decide to quit the company. Also, outline what an employee is entitled to if they are terminated, and for how long they can expect certain benefits.

7. Leave policy

Coming to the most important section, it’s vital you mention how much paid and unpaid vacation time each employee gets, as well as how much time they get for medical leave, paid family leave, and sick time. Some of these policies, such as family medical leave, are mostly enforced by the U.S. Department of Labor. In this case – ensure to comply with the same standards as other businesses in your state.

8. Non-disclosure agreement and confidentiality policy

To ensure your employees don’t misuse your company’s confidential information, be it internal operations or your client data – it’s critical you mention what your company considers as confidential information. Make a list and ensure your employees are aware of what information they can and can’t share. 

9. Anti-harassment policy

Your employee handbook policy should also include procedures for employees to report issues regarding harassment, retaliation, or discrimination. This not just protects your employees against discrimination and harassment but also protects your organization against fake or illegal claims. For instance, if the alleged harasser is a co-worker, the employer will not be held liable for the alleged conduct unless the employer knew or should have known about it. But if the alleged harasser is a supervisor, the employer will be vicariously liable unless it can prove that:

  • The employer exercised reasonable care to prevent and promptly correct the alleged hostile environment
  • The employee unreasonably failed to take advantage of the preventive or corrective opportunities provided by the employer, or the employee otherwise unreasonably failed to avoid the harm

10. Signature page

Last but not the least, a signature page is important for 2 main reasons:

  • First, it confirms the employee received the handbook and incentivizes each employee to read it through before signing 
  • Second, if you’re ever dealing with a wrongful termination lawsuit, it could help you in your defense

To sum it up,

An employee handbook policy states fundamental information about your company and the employee’s role(s) within your business. It outlines the basic need-to-know information about your company as well as offers in-depth information about your company’s policies and procedures that affect your employees on a daily basis. We hope, the above-mentioned points will help you in your journey of building a perfect employee handbook. If you already have one, it will help you analyze if it covers all the key elements!

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