An employee handbook or manual has two key purposes: (1) to inform the employee of the rules and regulations, expected conduct , and codes under which the business operates,  and (2) to protect the business from lawsuits.  A well-designed handbook should outline the employers expectation of the employee and what the employee may expect from the business.  Every employee must receive and copy and should sign a document saying they have received it.

The state in which you are located will have specific laws and requirements concerning employment and you need to include them in the manual.

There are a number of sites which will allow you to “fill in the blanks” and produce a handbook for a relatively low cost.  Below is an outline of some of the key items which must be in your manual.

Illustration depicting a roadsign with a rules concept. Sky background.

Employee handbook Legal requirements:

Do you require the employee to sign a Non-disclosure or confidentiality agreement? Do you require the employee to be bondable?  Outline all of the legal requirements.

Do you have a period (sometimes called a probationary period) during which new employees may be fired without cause. What is the duration of the period?


Compensation (See your state wage and hour laws)

What constitutes full time employment (30 hours? 40 hours?)

Do you pay for lunch or other down time?

What are the pay periods?  When do you pay employees? (e.g.  your pay period may be Thursday to Wednesday with salary paid on Friday.)

How do you pay? Cash is virtually unknown in the US now but detail the options (direct deposit?)

Work Schedules

What are your business hours? Detail shifts, special circumstances (“During the summer months all production employees are expected to work 10 hours of overtime per week”). Specify your rules on punctuality (and the penalty for lack thereof).  If you allow telecommuting, state when an employee make work from outside the office.  If you offer flexible scheduling, detail the program.

Dress and Behavior Codes

Do you have a dress code. Standards of behavior?  Here is where you tell your employees – as clearly as possible – how you expect them to look and comport themselves.  If you expect the equivalent of suits and ties, say so.  If you are going to use some ill-defined term like “business casual” be prepared to define it because I can attest that it is has no meaning to the many employees who consider jeans, visible underwear and abundant décolleté  appropriate business attire .  If they don’t meet customers, perhaps it isn’t as important to you. If they do, it’s important.


handbookjdHow your employees conduct themselves has a impact on you, on other employees, vendors and, most critically, on customers.  It is an unfortunate fact that too many have no training in basic manners and no understanding of business etiquette. If it is an issue for you, then lay down some guidelines.


Ethics is a conundrum because it covers such a range of behavior and may require different guidelines for people in different roles.  There is much written on the subject and I encourage you to partake of some of the available articles.  If you are in an industry which is regulated by a government, or you deal with a government entity you may have strict rules of behavior to follow, if not it will serve you well to have a written statement of what is and is not acceptable behavior.

Safety and Security

Start with OSHA (Occupational Safety and Health Administration) requirements and work from there. Also include your policy on outside hazards (bad weather, riots and the like). Discuss the employee’s responsibility for security in the workplace (locked doors, computers, machinery, etc.)

You should also include your rules on the security of information: how and by whom it may accessed, what security measures are installed to safeguard the company’s data and what should be done if a breech is suspected.


Outline your policy on privacy: are all emails sent from company computers subject to scrutiny? How about calls from company phones? Do you track employees’ internet use?  Set forth what it acceptable (shopping on Amazon during your lunch hour? Personal emails?) and what is not.


What benefits do you offer employees? Who gets them and when?

If you offer insurance (health, life and related benefits like flexible spending accounts), a 401K or other retirement plans, profit sharing, assistance with commuting expenses, or other perks, they should be outlined in the employee handbook along with the specifics of who receives which benefits and under what circumstances. For instance, “all hourly employees may opt into the health insurance plan after six months of full time employment” or “Salaried employees will have 25% of their 401k contribution matched by the company after one year’s service. The amount will be increased annually up to a 100% match.”

Vacation, Sick Days, and Other Time Off

What is your policy on vacation days? Yes, you need a policy. State whether or not – and under what circumstance – they will be paid.  See your state’s laws on this. If you have union employees this may be dictated by the contract. If the employee must take the days in a specified part of the year or month, say so or the tax accounting firm will have employees requesting vacation in April.  Do they accrue and, if so, for how long? Are employees required to take vacation days?

Sick days. This may be dictated by law or contract. If not, how many days may an employee be sick and still get paid (if any)?  Does staying home with a sick child count?  Be too lenient and they’ll go to Acapulco on your dime. Be too strict and every flu bug will infect the entire company.

Personal Days or Other.  How many, do you pay for them? 

An option is two roll all of them together and give employees a specified number of days per year to do with as they please.

Jury Duty is special instance and you may have to pay for the first five days. Check the governing laws.

Pregnancy is also a special situation which is governed by law.

Share This