Small Business 101: Writing an Employee Handbook

Before your small business hires its first employee, it is a good idea to create an employee handbook. For a large corporation, an employee handbook may be a lengthy document that discusses every company policy in detail. For a small business, an employee handbook can be far more basic, covering just key policies. Follow these 7 tips for creating an employee handbook.

Start with a mission statement. The mission statement is your opportunity to spell out your priorities for the business. It is critical because it can help to determine how employees view the firm and represent it to customers, suppliers, and others. If, for example, you emphasize integrity and customer service as two of the firm's highest values in the mission statement (and in your own business practices), your employees' actions are far more likely to reflect those values as well.

Discuss hiring policies, including such topics as drug testing, background checks and probationary periods.

Set out employment policies related to pay. These might include pay periods and when paychecks will be issued; paid time off (including vacation and sick leave); guidelines for full-time, part-time and probationary employment and for overtime pay; and the method for tracking hours worked (for hourly employees).

Detail policies that relate to the work environment. Touch on such issues as your firm's dress code (ideally with enough detail to avoid problems without being overly restrictive); work hours (including rules for flex time if your firm offers it); smoking policies (where employees can smoke and when and how they must discard cigarette butts); and personal use of business computers and other assets.

Describe disciplinary and termination policies. Be sure to clearly detail disciplinary policies, including warnings and penalties, and termination policies (such as whether employees will be paid for accumulated vacation pay or sick leave and how and how much notice should be given when an employee decides to leave the firm).

Make clear when and how employees will be evaluated.

Provide detailed information about benefits programs. Initially, your small business may not be able to offer benefits, in which case, this section will be omitted.

These are just a few of the most basic subjects that should be included in an employee handbook. Also, while you can write the handbook yourself, have it reviewed by your lawyer or a professional with expertise in the area of labor law to be sure that nothing in your handbook could inadvertently result in potential liability for your company. Also, there may be policies related to such topics as equal employment opportunity and harassment in the work place that should be included in your handbook.

Publishing an employee handbook may seem like overkill for a small business. However, taking the time to think through and detail your firm's personnel policies actually may save you a lot of time and hassle later. Also, remember that your initial employee handbook probably will be a work in progress that you will update and expand over time as your workforce grows and personnel issues become more complex.

Sources:

Jean Murray, biztaxlaw.about.com , Creating an Employee Handbook, Part 2: Company Policies

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