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Creating an Employee Handbook

The Introduction to your Employee Handbook is more than just a few words about your company. It lets your employees understand the importance of the handbook and includes an area for employees to sign to acknowledge they have read the handbook.

by Jean Murray
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Your Employee Handbook: The Introduction

Before you begin writing your handbook, one note of caution:

Be sure to have an attorney who is an expert in the field of employment law review your handbook to be certain that there is nothing in it that could cause you problems. Paying an attorney to provide this review could save you from including something that could be misunderstood by a reader.

The Introduction to your Employee Handbook is more than just a few words about your company. It lets your employees understand the importance of the handbook and includes an area for employees to sign to acknowledge they have read the handbook. Here is more information about what the Introduction section includes:

- The History of Your Business
 Briefly describe your business, including how it began and significant events in its history.

- Your Statement of Purpose or Mission Statement
If you have created a vision or mission statement for your business, discuss it here. Stating your vision helps employees see what you believe in, and gets them excited about working for your company.

- Welcome Letter
Include a welcome letter, speaking directly to employees and letting them know how important you think they are to the organization.

- Statement of "This is not a Contract"
In your welcome letter or a separate statement, provide a statement to let employees know they aren't being given any guarantees:

"This Handbook does not constitute a contract of employment, nor does it provide any guarantee of employment."

- A Signature Page
Include a statement that all new employees must sign the handbook to show that they have read the document and understand it.

The introduction is an important part of your employee handbook. Be sure your attorney reviews this section in particular.

Disclaimer: I am not an attorney and I am not providing legal advice. This article is being provided for information and should not be relied on. Consult an attorney for this document and all documents of this type.

The first major section of your employee handbook contains employee policies. These policies give information to employees about your expectations of them.

- An employee benefits and time off section, which includes:

o Attendance and Punctuality
Include a section stating that employees are expected to be at work every day and on time. Define "excessive" absenteeism and "habitual" lateness.

o Breaks, lunch times, staff lounge
May employees take breaks at any time or are there specific break times? What about lunch? Describe the protocols for use of the staff lounge.

o Computer software and documents
Make employees aware of copyright laws relating to documents. What documents may not be copied? What copies may be made of software? Where are the software licenses and what do they say?

o Confidentiality; gifts
State policies relating to business matters and proprietary procedures. Employees should not take gifts from customers except for very small tokens.

o Discipline/termination
Describe procedures for discipline, including warnings, written and oral. Include an appeals process, even for a small office, so employees feel they have "somewhere to go." Describe circumstances under which employment may be terminated. How much notice is given? How is accumulated vacation paid?

o Drugs and alcohol use; smoking policy
State that use of drugs or alcohol on company premises is cause for immediate dismissal. Do you allow smoking on company premises?

o EEOC statement
You do not discriminate against any one for any reasons; you might also discuss accommodation for religious observances, and policies regarding applicants and employees with disabilities.

o Equal Pay
You evaluate your employee pay depending on the level of the position and on performance, not on external factors such as sex.

o Evaluations
Tell employees how and when you conduct performance reviews.

o Employee status (full-time vs. part-time; probationary)
Describe the weekly hours required for full-time employment (32? 35? 40?). Do full-time employees have benefits (such as health insurance) that part-timers do not? Do part-timers receive paid vacation?

o Harassment
State that your company does not tolerate it, either between employees or involving customers. Discuss how harassment complaints are to be handled.

o Hiring policies
Describe how you advertise a position, internally and externally, and your interview process.

o Office Dress Code
You may want to include a general statement about adherence to dress policies, including hair, makeup, jewelry. If employees are required to wear specific uniforms, who pays for these? Who pays for cleaning? Foul or abusive language can be "just cause" for termination.

o Orientation/training of new employees
Describe your company's program of on-the-job training and orientation. Is orientation time paid?

 o Pay periods/time sheets/paychecks/overtime
How often are employees paid? (Every two weeks or twice a month are typical.) Emphasize that time sheets/time cards must be maintained by all employees; when must they be turned in? State that paychecks include information on deductions, year-to-date information. State when employees are eligible for overtime.

o Parking for employees
Describe your parking lot and any restrictions on its use. Do employees need a parking card to enter the lots? How are the lots monitored?

o Personal phone calls and visitors
Describe your policies on visitors and personal phone calls.

o Probationary period
It's a good idea to include a period of time, usually not more than 90 days, during which a new employee is evaluated and the employment is "temporary" or "at will." You can adjust pay after this probationary period, to provide incentive to a new employee. Usually, probationary employees do not receive benefits, but will you pay probationary employees for paid holidays that fall within the probationary period? Do probationary employees begin accruing time toward calculation of vacation pay during this time?

o Resignations
Request that an employee who wishes to resign give you at least two weeks' notice.

o Weather days
Describe how and when you will notify employees if the business is closed for bad weather. Include a statement on how you will treat employee time off for weather when the business remains open.

Employee Benefits

The last part of your Employee Handbook describes the benefits and time off you provide employees:

- Waiting periods
Must employees wait a certain time to receive benefits? Can probationary employees begin to accrue (accumulate) benefits?

- Paid time off (vacations, personal days, sick time)
This section is handled in a variety of ways. There is no federal law that requires you to pay an employee for time off, including vacations, holidays, personal time, or sick time, though "time off" is high on the list of expectations by employees. Employees do have the option of taking time off without pay. Any paid time off will directly affect your productivity and customer service. One way to handle this is to provide an overall "paid time off" benefit that accumulates over time to a maximum of "x" hours. The paid time may be used for any purpose. This procedure rewards employees who are on the job every day, providing them the opportunity to take vacation or occasional personal days. Require employees to schedule PTO well in advance, except for illnesses.

- Vacations
Describe vacation eligibility; how long does an employee have to work to be entitled to take a vacation? How is the length determined? How are vacations paid? What happens if someone leaves; does he/she receive pay for unused vacation time? Most employers do not allow employees to receive pay instead of taking vacation, for several reasons. Don't allow an employee to carry over vacation to the next year; everyone should take vacation every year. When must employees announce their vacation plans? Who gets priority in scheduling?

- Holidays
No federal law requires holiday pay; if the office is closed, you do not need to pay for this time. What paid holidays do you provide? List specific holidays for each year. You may decide to change the holidays from year to year, but usually you will need to maintain the same number. Must employees work the day before and the day after a holiday in order to receive holiday pay? You don't need to pay part-time employees for holidays, even if full-time employees receive them. If you decide to close the office on a particular day and not pay employees, you should give them notice in advance.

- Sick time/Personal Days
Most small offices find it a great burden to pay employees for additional time off, both in terms of staffing and financial cost. You may want to give employees a limited number of paid personal/sick days a year, knowing they will probably take them, whether they need them or not. You may want to designate these days collectively as "personal" days, including sick days; don’t make people lie about being sick to get a day off. Do not allow employees to carry over these days to another year; use them or lose them. Can employees take ½ days or a certain number of hours, rather than a full day? Part-time employees are usually not eligible for sick time. Describe the procedure for requesting personal/sick days.

- Jury Duty
You are required to give employees time off if an employee receives a summons for jury duty. How will you handle this? Will you pay them during this time? Will you require them to turn in their jury duty pay or may they keep it? When must they report back to work ("when court is not in session" is common)? Be sure you consider the "worst case" scenario in this section.

- Leaves of Absence
Although you do not have to provide unpaid leave, you may want to consider this provision, particularly for valuable employees. What is the maximum time that someone can take unpaid leave and still be assured of a position upon his/her return to work? If you provide insurance, can the person continue this insurance if he/she pays the premiums? What happens when the employee returns; does he/she receive the former position?

- Military leave
The 1994 Uniformed Services Employment and Reemployment Rights Act requires employers to make a reasonable effort to retrain or upgrade skills of employees returning from military duty. What about employees who go to summer camp or to other short-term military obligations? How will their return be handled?

When you have completed this section, you are almost ready to show it to employees. But before you do that, take it to your attorney or an attorney who is an expert in employment law for review.