Employment Discrimination Blog

Tuesday, January 31, 2017

Why Your Business Needs an Employee Handbook

Does my small business need to have an employee handbook?

Many small business owners think that employee handbooks are only useful for large organizations, but this is not the case. In fact, it is crucial for any business to establish formal rules concerning the employer-employee relationship and the rights and responsibilities of the parties. Ultimately, a formal handbook can protect a business owner in the event of an employee dispute.

What policies should be included in an employee handbook?


The first topic to address is employee compensation and whether employees are paid an annual salary, an hourly wage, or commissions. Employees should also be notified when they will be paid, weekly or bi-weekly, although it is customary for sales people to be paid on a monthly basis. In addition, the compensation policy should specify how hours workers are recorded, how taxes are calculated and deducted and whether overtime is paid.


If your business offers fringe benefits, such as employer sponsored health insurance, retirement plans, profit sharing plans and bonus, this must be stated in the handbook as well as rules for eligibility.

Work Schedules

The handbook should specify the company's hours of operation, hours required each day, rest breaks, lunch break and rules on attendance and lateness, how paid time off accrues, as well as policies on flexible work hours and telecommuting.

Employee Conduct

Informing employees how they are expected to conduct themselves in the workplace is a must, and addressing issues such as discrimination and harassment is crucial. Your business must have zero tolerance for employment discrimination and sexual harassment and clearly state that this conduct is grounds for termination. Less onerous workplace violations, such as absenteeism, tardiness, misuse of company email, the internet, social media, and other company equipment, should also be listed, and what disciplinary actions will be taken.

The Takeaway

Regardless of the size of your outfit is crucial to create a comprehensive employee handbook. Obviously, the size of your business and the nature of your industry will dictate how extensive the handbook should be. If you are thinking about putting an employee handbook in place, seek the advice of an experienced employment law attorney.

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