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Creating a small business employee handbook serves as a vital tool for any company. It can help you streamline your operations, manage your staff, and promote a positive work culture. It also provides clarity on company policies, procedures, and expectations. This guide will help you determine what to put in your employee handbook, proposed solutions tailored to your needs, and a template for creating your handbook.

In today’s business setting, small businesses face challenges when managing their workforce. The employee handbook is a crucial tool for communicating company policies and expectations.  As such, it serves to protect both the business and its employees. 

Your employee handbook should fit your culture and values and be tailored to your specific needs.  

This guide will help small business owners face challenges in employee management. By addressing key questions and providing practical insights, it will equip businesses with the tools and knowledge needed to:  

• Develop an employee handbook tailored to their specific needs and legal requirements.  
• Implement essential policies and practices covering employment terms, workplace conduct, benefits, safety procedures, and more.  
• Leverage time tracking systems and scheduling best practices to enhance efficiency, ensure legal compliance, and promote workforce productivity.  
• Foster a positive work culture.  
• Lessen legal risks through creating and enforcing Human Resource (HR) policies.  
• Improve communication, accountability, and compliance within the organization.  

Importance of an Employee Handbook  

Your employee handbook is the backbone of your business. It helps establish clear expectations. It also provides guidance on company policies and procedures, promotes consistency in employee management, and reduces legal risks.  

While you are not required to have a handbook, you do have certain legal notices that you should provide to your employees. If a law is updated, then your handbook should be as well. Changes to the employee handbook should be done through a formal process and all changes should be documented. Your employee handbook should remain a relevant and valuable resource.  

There is no one-size-fits-all approach to creating an employee handbook. As we explore how to create one, remember it is important to match the tone and content to your culture. Also, keep in mind the future growth of your business.  

The Role of the Employee Handbook  

Definition and Purpose  

An employee handbook is a set of guidelines developed to ensure the company’s mission, vision, requirements, and expectations are clearly defined. It should be accessible to all employees. An employer should provide the document to new employees during the onboarding process. 

Sue Bingham, a writer for Harvard Business Review states, “Creating an environment of mutual trust is much easier than trying to run an authoritarian regime free of rule breakers. And there are some situations where making something a “rule” can really backfire.” 

Review each policy you create and determine if you and your managers can manage those expectations. Also, are you creating a rule that may backfire and even keep potential good team members away?  

Here are some statistics in which HR employees were asked what is challenging about implementing an employee handbook:  

• 66% said getting employees to read the handbook  
• 62% said keeping it compliant with state laws.  
• 57% said training the managers to enforce the handbook.  

Becomes a Sales Tool  

When hiring your new staff, an employee handbook can serve as a sales tool for new staff. It can also be a tool to communicate your values, culture, and benefits. How can it help you recruit new hires and be a valuable sales tool?  

Great workers like clear policies and direction. When hiring new staff, discuss your culture, values, and mission. Review the benefits of working there too. Your handbook can be a great sales tool for you when hiring. 

 Legal Compliance Protects the Company  

Having a well-written handbook can help protect you from legal disputes and assure employees your small business has clear, accessible, and fair policies in place.  

You also want to ensure you include any legal language required by your state or location. Also, some states require employers to distribute legal policies to their employees in writing.  

The employee handbook can be the best place to place your required legal notices. Many new laws go into effect, so it is a good idea to update it with your managers and attorney annually or when laws change.

Defines HR Policies, Procedures, and Expectations  

An employee handbook defines the rules, procedures, and expectations for working at a small business. Here’s how it does this: 

• The handbook explains the company’s HR policies, which are the rules about how employees should behave and what their rights and responsibilities are. By clearly stating these rules, the handbook helps employees know what is expected of them and what will happen if they don’t follow the rules. 
• Besides rules, the handbook may describe procedures for different HR-related tasks. This helps make sure everything is done fairly and consistently. 
• Lastly, the handbook sets clear expectations for employees about their roles, duties, and performance standards. 

Improves the Onboarding Process

By sending them an employee handbook once they have accepted their offer, you can start the onboarding process before they start their first day. Before they begin, they can read your culture, values, and mission. It may also go into detail about clocking in and out, dress code, and parking.  

Reference Tool for HR Compliance  

Once you have completed your employee handbook, it will become your reference book for you and your managers. Many small business owners do not have an HR department, or they outsource it.  

 It can help management decide the best actions to take in many situations. 

 Gives Employees Clear Direction  

It can also give your staff clear direction on how to navigate various aspects of their employment. For example, it may answer questions such as, “How do I clock in? How do I request time off? How many hours do I have to work? How can I view my employee records? Can I post on the bulletin boards?” 

 Sets Clear Expectations  

The employee handbook should set clear expectations for employee behavior, performance standards, and conduct in the workplace. It can help employees understand what is expected of them and how they can contribute to the company’s success.  

Promotes Consistency  

Consistency is crucial for fairness and equity in the workplace. The handbook shows consistent guidelines for HR policies, procedures, and practices. Consistency fosters a sense of trust and fairness among employees. Also, it minimizes the risk of disputes or grievances.  

Empowers Employees  

By providing your team with access to information about their rights, benefits, and resources, the handbook empowers them to advocate for themselves and make informed decisions about their careers. If they feel empowered your staff will become more engaged.

They’re not just punching the clock; they’re invested in their work. They’re more likely to speak up with ideas, tackle challenges head-on, and stay. Involving your staff in the creation or review of your handbook before it’s finalized will ensure greater engagement and buy-in. 

Boosts Employee Relations and Morale  

A well-written employee handbook promotes transparency, fairness, and respect. By showing your business is fostering a positive work environment and supporting its employees’ well-being, it can help boost morale and help employee relations. 

What is the role of HR Policies in Employee Management?

HR policies play a role in employee management by providing a framework that guides both employer and employee behaviors. Furthermore, they help ensure consistency, fairness, and legal compliance across your small business. They also set clear expectations for conduct and performance.  

How Do I Create an Employee Handbook?  

Creating an employee handbook involves several key steps to ensure that it is detailed, clear, and legally compliant. Here is a checklist so you know what to include: 

• Identify the purpose, objectives, and goals and plan ahead. 
• Identify who will be involved in creating and reviewing your handbook. 
• Gather and review any existing policies, procedures, and guidelines. 
• Ensure that all policies comply with local, state, and federal laws.  
• Create a detailed table of contents to structure the handbook. 
• Breakdown decided sections to include in your handbook. 
• Discover which policies you need to write. 
• Establish deadline dates and project timelines.
• Draft the content 
• Once completed, review and revise.  
• Consult legal counsel to verify compliance with employment laws. 
• Use a consistent format and design that is easy to read and navigate. 
• Ensure the handbook looks professional and is free from errors. 
• Once completed, consider providing both print and digital copies to employees. Some 
• employers make a handbook in a binder so they can replace policies easily if needed. Ensure it is accessible to everyone.  
• Introduce the handbook during the onboarding process for new employees. 
• Conduct training sessions to explain key policies and answer any questions. 
• Require employees to sign the acknowledgment form. 
• Keep a record of signed acknowledgment forms in employee files. 
• Set a regular review schedule (e.g., annually) to update the handbook as needed. 
• Update the handbook whenever there are significant changes in company policies or employment laws. 
• Communicate any updates to all employees and ensure they receive the latest version. 

By following these steps, you can create an employee handbook that helps manage employee expectations and ensures legal compliance. 

Key Components of an Employee Handbook 

Start your employee handbook with a positive message. You should spread a positive message throughout its entirety. It also shouldn’t sound threatening. If policies are detailed enough, they can also prevent favoritism. Do not allow your policies to negate another policy or make them difficult to administer.  

Your handbook should flow and be easy to administer and understand. 

 What Should Be Included in the Employee Handbook?

Here are some key items to place in your handbook:  

Welcome Statement  

Discuss why your staff is vital to your business. This is the first page your new workers will read. It is important to convey a positive message in this section. Include a welcome letter from the CEO. Additionally, explain the history of the business. Also, discuss the goals of the company. Where do you want to go from here? Do you have long-term goals? Even if you don’t outline them here, make sure your staff knows what they are.  

Mission Statement, Vision, and Values  

Including your mission statement, values, and vision in your employee handbook is important for several reasons: 

• It helps everyone understand the company’s purpose, principles, and goals, creating a unified culture. 
• Clearly stating values sets expectations for how employees should behave. 
• Values guide employees in making decisions that support company goals. 
• Highlighting the mission and vision boosts employee morale and engagement by showing how their work contributes to the company’s goals. 
• A clear mission and values attract and keep employees who fit the company’s culture and purpose. 
• Employees will know the company standards, offering legal protection in case of disputes. 

 Disclaimers

Every state has its own laws. For example, almost every state recognizes at-will employment. However, not all states do. Your team may have questions about why you included an employment-at-will statement. Likewise, be prepared to answer questions.  

Furthermore, they should understand that the handbook is not a contract. For example, you can say, “This handbook is not a contract, express or implied, nor does it guarantee employment for any specific length of time. Although we hope our employment relationship will be long term, either the Company or you can end the relationship at any time, with or without notice, with or without reason, to the extent allowed by law.”  

 The disclaimer should also cover the flexibility and right of senior leadership to amend and interpret the policies contained in the handbook, with or without notice to employees.  

 Legal Policies  

There are several federal and state legal policies you should include depending on your company size, industry, location, and type of workforce. Here are some of the legal policies you might want to include:  

 This is where you should include legal policies such as:  

• Anti-Discrimination Laws (Civil Rights Act, ADA, EEOC)  
• Commitment to Diversity  
• Non-solicitation policy  
• Anti-harassment and non-discrimination policies  
• Leave Policies (FMLA and ADA)  
• A religious accommodation policy  
• Pay and Wage Requirements  
• A background check policy  
• A contractual disclaimer and at-will policy statement  
• Privacy Regulations  
• Workplace Safety Regulations  
•  Nursing Mothers  
• State or Local Laws  

Employers with fewer than 15 total employees are not covered by Title VII. It is important to review what policies and laws you are required to follow. You may need a certain number of employees before putting that policy in place. 

Ethical Standards and Code of Conduct  

What are your ethical standards? What are your core values?  

It is important to write a code of ethics. Also, a code of conduct helps guide the behavior of others. You want your team to represent the company like you would. What is important to you? Also, what message do you want to convey to your clients? When bidding on contracts, make sure your clients know your ethics policies. 

 Some policies to include here are:  

• Outside employment  
• Dress code 
• Using company bulletin boards  
• Proprietary information  
• Conflicts of interest  
• Confidentiality 
• Solicitation and Distribution  
• Whistleblower 

 Here are some ideas to include in your ethics policy:  

• Values  
• Standards of conduct  
• How to handle mistakes  
• Honesty  
•  Professionalism  
• Procedures for reporting unethical behavior  
• Gifts policy 
• Ethical training 

It is important to foster an ethical culture. Create an environment where transparency and openness are encouraged. 

Compensation Policies  

Include employee types and overtime requirements (i.e., exempt, non-exempt, full-time, part-time, contract).  

You should also include in this section:  

• Work Week  
• Attendance Policy 
• Pay Schedule 
• Compensation 
• Expense and Reimbursement  
• Working from Home 
• Remote Work 
• Travel Pay 
• Payroll Deductions  
• Salary Advances 
• Direct Deposit 
• Meals and break periods  
• Time Clock and Clocking In  
• Overtime Pay  

Think about every job you had and what you wanted to know. Additionally, review your former handbooks if you can. What were they missing?  

Anti-discrimination, Harassment, Retaliation, and Reporting Policies 

Include a harassment and discrimination policy. Plus, give specific examples. If you have a zero-tolerance policy, there can be no exceptions. Are you able to offer that security?  Also, make sure any leaders you hire can follow these rules too. 

What happens when they violate the policy? Provide clear reporting procedures and protect whistleblowers from retaliation too. Plus, emphasize the importance of creating a safe workplace. 

 Employee Timekeeping and Tracking  

Employees need to know your expected work schedules and how to record their time. Some industries require more stringent tracking than others, so you must be clear and upfront with your employee’s timekeeping responsibilities. Additionally, they should know how to request time off, and how much advanced notice is required. 

Also, when using a time tracking system, your employees should understand how a time tracking system works. For example, some time tracking apps allow you to deduct a break automatically from the employee’s timesheet. You should inform your employees of this policy.  For example, using ezClocker’s time tracking the program will add an automatic break up to 30 minutes if your employees have not taken their break.  

When using this feature, include this in your employee handbook and communications if you enable automatic breaks. 

This is a great feature to have in case your state requires meal and rest breaks. For example, non-exempt employees in California are entitled to meal and rest breaks. They must receive a 30-minute unpaid meal break if they work more than 5 hours in a workday, and a second 30-minute meal break if they work more than 10 hours. Additionally, they are entitled to a 10-minute paid rest break for every 4 hours worked. 

Because some states have complicated labor labors you may want a good time tracking software that can help you be compliant. 

Many errors can be caused by using manual timesheets. Implement a time tracking system that will fit your small business needs. Once you determine which time tracking system you use, include those details in your handbook.  

 IT and Social Media Policies  

Your IT and social media policies should also include rules about the use of technology. Can your staff use social media platforms on-site? Can they use computers for their social media? They should also understand the privacy data of clients and customers. Do you have sites blocked or will you track what is researched? Plus, what is not tolerated?  

 Some key elements to include are:  

• Acceptable use of company devices and software  
• Social media use  
• Data security and confidentiality policies  
• Standards for online behavior  
• Rules for reporting any IT or social media policy violations  
• Training on the policy and its importance  
• No expectation of privacy statements   

 Workplace Safety and Health Policies  

In this section, your policies should show that you value a safe and healthy workplace. Likewise, give clear expectations for your team regarding safety. Also, set rules for identifying and reporting hazards. Plus, develop a process for investigating accidents. 

Policies to include:  

• Drug-free workplace testing policy (check your state laws)  
• Accident reporting  
• Smoke-free workplace policy  
• Vaping policy 
• Workplace violence  
• Safety Policies 
• Emergency closing procedures (include how workers will be notified)  
• Severe weather policies and what your staff should do while at work.  
•  How to access their file  
• Separation and Exit Policy  
• Returning Company Property  
• References 
• Exit Interviews 

Performance and Disciplinary Policies  

Your company should also write out your policies for performance. The policies should include:  

• Performance reviews  
• Poor performance or misconduct rules  
• Progressive discipline steps  
• The steps to address performance  
• Employee rights in the process  

Benefits and Leave Policies  

In this section you should include information about:  

• Paid holidays 
• Vacation  
• Sick leave (also include who your staff should notify and acceptable methods).  
• Military leave 
• Bereavement 
• Jury Duty/Court 
• Time off for voting  
• Social Security and Medicare  

 Also, include the benefits you offer and when they become eligible. Some examples are:  

• Medical  
• Dental  
• Vision  
• Life Insurance 
• Short-term/Long term disability  
• 401(k) plan 
• Workers’ compensation  
• Employee assistance  
• Tuition Reimbursement  
• Other bonuses and perks  

Employee Training Opportunities  

Employee training and development should also align with the job or industry in which they work or want to pursue. When you offer these, it shows your commitment to your current and future workforce. This is why it is good to include it in your employee handbook. 

You can also include:  

• Personal and professional growth  
• Earning new knowledge and skills. These can also be through workshops, seminars, courses, and on-the-job training.  
• Access to resources such as books, online courses, and professional associations.  

 For example, offer support to pursue certifications and other credentials relevant to their job.  

Also, if you are a very small business, think about how you want to develop your great workers. Additionally, how can they know how to move up in your company and how can you help them succeed?  

 Leaving the Company 

When employees resign, retire, or leave involuntarily, there are steps and procedures that both the employee and the company may want to be aware of. Here are some topics to include: 

• Separation and Exit Policy  
• Final paychecks  
• Returning Company Property  
• References  
• Exit Interviews 

Employee Handbook Acknowledgement  

Finally, the last page is where the employee acknowledges receipt but also agrees to abide by the policies contained within. Also, include contact information for HR and management. This signed page should be kept in the employee’s personnel file.  

Importance of Employee Time Tracking Software  

Why is time tracking important for businesses? 

As mentioned above, employee time tracking is very important for your business, and you should include all information regarding your tracking system in your handbook.  

Using online timesheet software can help small business owners make fewer mistakes and ensure things are correct. When they use a time-tracking system, it stops errors and keeps data accurate better than doing it all by hand. That’s because automated systems are less likely to mess up like people can, which could mean getting timesheets and payroll right. 

Incorporating Employee Time Tracking Policies into the Handbook 

 Incorporating employee time tracking policies into your handbook involves a few key steps:  

• Define the purpose of the time tracking policy. Explain why accurate time tracking is important for the organization.  
• Clearly state the expectations regarding time tracking. This includes when employees should clock in and out, how they should record their time (e.g., using specific software or methods), and any rules for breaks and meal periods.  
• Detail the procedures for reporting time worked, requesting time off, and handling discrepancies or corrections. Provide step-by-step instructions to make it easy for employees to follow.  
• Ensure that your policies comply with relevant labor laws and regulations. This might include requirements for overtime pay, record-keeping, and meal/rest breaks.  
• Outline the consequences for non-compliance with time tracking policies. This could range from verbal warnings to disciplinary action, depending on the severity and frequency of violations.  
• Offer resources and support for employees who have questions or need assistance with time tracking. This might include training sessions, user guides for time tracking software, or designated personnel to contact for help.  
• Regularly review and update your time tracking policies to reflect any changes in laws, regulations, or organizational needs. Communicate updates to employees and provide training if necessary.  

Benefits of Clear Time Tracking Guidelines  

What are the benefits of using a time tracker for employees?

Clear time tracking guidelines offer several benefits:  

• Employees understand how they should record their time, which reduces confusion and mistakes. 
• Consistent guidelines ensure all employees are treated fairly and equally.  
• Ensures compliance with labor laws and reduces legal risk for your small business.  
• When everyone follows the same process, it streamlines payroll and saves time for everyone.  
• Employees are held accountable for reporting their time.  

 How Can I Improve Time Management in my Workplace?

Improving time management in the workplace involves putting strategies and tools in place that help employees prioritize tasks, minimize distractions, and enhance productivity.  

Here are some steps you can take to improve time management in your workplace: 

• Clearly define company and team objectives. Ensure that each employee understands how their tasks align with these goals. 
• Encourage the use of daily or weekly to-do lists, project software, and timekeeping software.  
• Promote the practice of time blocking, where employees schedule specific blocks of time for focused work on particular tasks.  
• Use software tools that can you and your employees. Using a time tracking app like ezClocker can help with time management. For example, you can utilize job tracking to create jobs and assign them to your employees. It can also help employees understand how they spend their time and identify areas for improvement. 
• Make sure your meetings have time limits and agendas.  
• Provide training and development on timekeeping and time management.  
• Encourage open communication between managers and employees about workload and time management challenges. 

Employee Time Tracker Solutions to Track Work Hours  

There are many time tracking solutions to track hours. At ezClocker, we work with our clients to help find new solutions. Here are some examples of how ezClocker can help with the integration of employee time tracking software into your small business.

Feature	Description	Benefit
Easy to Use	ezClocker offers a user-friendly time tracking software that is easy to use.	This ensures your new employees, who may not be tech-savvy, can use the software easily in case the employer does not have time to train.
Mobile Accessibility	With ezClocker’s mobile app, employees can conveniently clock in and out using their smartphones or tablets, allowing for accurate time tracking even when they’re on the go.	This mobile accessibility ensures that employees can record their work hours from anywhere, whether they’re in the office, at a client site, or working remotely.
GPS Verification	ezClocker’s time tracking software includes a GPS verification feature that works only when they press the clock-in and clock-out buttons. This allows the employer to verify they were at the correct location.	This helps ensure accountability and transparency in employee time tracking, especially for mobile or remote workers who may not have fixed work locations.
Online Scheduling	ezClocker’s time tracking software includes online scheduling so employees are notified immediately when a schedule is changed.	This helps ensure accountability and transparency in employee time tracking.
Real-time Reporting	ezClocker provides real-time reporting capabilities that give employers instant access to employee time tracking data. Managers can generate customized reports to track employee work hours, monitor overtime, and analyze labor costs.	This real-time visibility helps businesses make informed decisions and stay compliant with labor regulations.
Payroll Integration	ezClocker’s time tracking software integrates with popular payroll systems, such as Paychex, Gusto, and ADP. You will export the file out of ezClocker and then import it into the payroll software.	This integration eliminates manual data entry errors and streamlines the payroll process. As a result, payroll administrators can process paychecks better.
Job Tracking	ezClocker’s job tracking software allows you to create jobs, assign them to employees, and track how many hours were spent on a job.	The job tracking feature saves time knowing where your employees worked and how long. This prevents you from guessing how much time a job took and makes billing your clients easier.
Time Off	Requesting time off is easy to do and the manager is notified immediately of any requests. Likewise, the employee is notified immediately of approval.	This allows your employees to never second guess whether their requests are approved or not. No paperwork, just a simple solution to time tracking.

Online Scheduling Software and Online Timesheets  

Using online scheduling software and online timesheets can make things easier for everyone at work. With scheduling software, employees can see their shifts and request time off easily. Timesheets help keep track of hours worked, making sure everyone gets paid correctly. By including policies about using these tools in the employee handbook, everyone knows what to expect. 

What are Best Practices for Employee Scheduling? 

It may be difficult to schedule employees if you have a labor shortage or if you have fewer employees. However, effective employee scheduling is crucial for ensuring operational efficiency, employee satisfaction, and optimal customer service.  

Here are some best practices for employee scheduling if your small business can comply:  

• Use historical data to forecast peak times to schedule staff.  
• Determine the hours when your business needs the most coverage and ensure staffing during those times.
• Collect and respect employees’ availability and preferences as much as you can. 
• Match employees to shifts based on their skills and qualifications to ensure high-quality service. 
• Provide a balance between work hours and personal time to avoid burnout. 
• Utilize scheduling software to streamline the process, reduce errors, and save time. 
• Ensure the software allows for real-time updates and easy access for employees to view their schedules. 
• Communicate scheduling policies clearly, including procedures for shift swaps, call-ins, and time-off requests. 
• If you can, allow employees to swap shifts with approval to accommodate personal needs. 
• Use a mix of part-time and full-time employees to cover shifts more flexibly. 
• Ensure shifts are distributed fairly among employees to prevent favoritism. 
• Rotate desirable and less desirable shifts among staff to maintain fairness. 
• Monitor the effectiveness of schedules and make adjustments as needed. 
• Ensure schedules comply with labor laws regarding working hours, breaks, and overtime. 
• Listen to employee feedback. 

By implementing these best practices, you can create effective employee schedules that meet the needs of both your business and your staff.  

Final Thoughts on the Importance of an Employee Handbook 

Using our guide, compile a list of items to include in your handbook. Research and review other items you may want to include too. Additionally, ask a legal expert to review your handbook. Ensure you are following all federal and state laws. Compile frequently asked questions and discuss whether these should be included in your employee handbook. Update your handbook when there is a new law or at least annually. 

 Also, make it a formal process and document any changes you have made and when they are made. You may need these documents later for legal purposes. This handbook can prevent many problems but is also important that your leaders follow it too. Hire leaders who are consistent and treat all team members equally. 

Seek legal advice to ensure compliance with state and labor laws. By investing the time to create an employee handbook, you can create a positive work culture, reduce legal risks, and improve communication. Start today by building a stronger, more efficient workplace for your business, your leaders, and your employees. By following the insights and strategies outlined in this guide, you can develop policies and practices that help your small business.