7 Things You Need to Have Written in Your Employee Manual

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Your employee manual is an important document that gives workers an idea what to expect from your company. It can also protect you against employment lawsuits for harassment, wrongful termination, or discrimination. Ensure your handbook is as effective as possible by including these 7 things.

#1. At-Will Employment Clause

In every state except Montana, companies may adopt an “employment at will” policy. This means you are free to terminate someone’s employment at any time and for any reason, provided you do not violate any federal, state, or local laws in doing so. At-will employment is generally understood; however, it is nevertheless a good idea to include language similar to the following in your company handbook:

(Name of company) is a legal entity doing business in (state). We are an at-will employer, meaning that we may exercise the right to terminate our relationship with you at any time and for any reason. We may or may not provide advance notice of our intentions to do so.

#2. Disclaimers

Near the front of your manual, include disclaimers such as:

  • No guarantee of contract. This lets workers know that their employment is not guaranteed for any specific amount of time, and may be terminated by either party without notice.
  • Supersedes all previous policies. Include a clause stating that the handbook supersedes any previous manuals, policy letters, memorandums, etc.
  • Subject to change. State that policies are subject to change, and that all modifications will be provided in writing as they occur.

#3. Employee Behavior

This section is where you will spell out what expectations you have of your employees. This provides several benefits such as:

  • Ensuring that everyone is held to the same standards
  • Eliminating favoritism.
  • Giving workers clear guidance on how to behave
  • Preventing ethics violations.

Some things you may want to address in this section include:

  • Dress code
  • Cell phone use
  • Use of company computers and email
  • Absenteeism
  • Harassment and discrimination
  • Substance abuse
  • Conflict resolution

#4. Performances and Reviews

Spell out when, where, and how performance reviews will be conducted. Doing so will eliminate uncertainty and ensure that everyone gets the same opportunity for advancement. Whenever possible, provide guidelines for determining raises and promotions. That way, workers will know what they will be evaluated on, and can better prepare themselves.

#5. Benefits

Discuss your company’s benefits so that workers have a clear picture of them. When employees know what benefits they are entitled to, they are less likely to ask questions of their HR reps.

Just knowing they have certain benefits can give people a sense of pride about working for your organization. Finally, listing all of your benefits provides transparency. Each person knows what benefits are available and therefore cannot say that certain ones were not offered to them.

Some benefits you may want to cover in your employee manual include:

  • Vacation time. How much vacation time will an employee earn each year? What are the requirements for using it? Will unpaid vacation time roll over to the next year?
  • Sick time or other paid time off. How much time is given? Under what circumstances can workers use it? How is it requested?
  • Medical, dental, or life insurance. Who is eligible? What is the drop/add period? Are there any life events that would allow employees to drop or add coverage outside of the enrollment period?
  • 401(k) or other retirement plan. Who may join? What are the maximum contribution amounts? Does the company match funds? If so, how much?
  • Stock options. Do employees have the option to purchase company stock at a discount? If so, how do they go about doing that?
  • Profit sharing. Does your company offer profit sharing bonuses? Under what circumstances?
  • What other bonuses do you offer? How does an employee become eligible for a bonus?
  • Do you offer a discount on merchandise? If so, how much? Are certain categories excluded? Does the discount also apply to family members?

#6. Leave Policies

There may be times when employees will need to be absent other than an illness or regularly-scheduled vacation time. Many of them cannot be avoided either, which is why you should address issues such as:

  • Jury duty. By law, you cannot discriminate against someone who has been called for jury duty. This means you cannot consider that person absent or require the use of sick time. However, you can spell out the requirements for notifying you of jury duty. If your company makes up the difference in pay, you may want to mention this as well.
  • Military service. Ensure your employees who are members of the National Guard or Reserve forces know you fully comply with the provisions spelled out in the Uniformed Services Employment and Reemployment Rights Act (USERRA).
  • Bereavement leave. How much time off is given for the death of an immediate family member? Is that time off paid or unpaid? What family members qualify?
  • Family Medical Leave Act (FMLA). Provide instructions on how to apply for leave under the Family Medical Leave Act.

#7. Acknowledgement Page

The final page of your booklet should contain a tear-out sheet for the employee to sign stating that he or she has received a copy of the employee handbook and has read it. Include a line for that person to sign and date acknowledging receipt and then file this document with your personnel records. Do the same every time you make a significant change to your handbook. In doing so, you can clearly document that everyone was made aware of your policies.

Assistance with Company Handbooks and other HR Functions

Coming up with an effective company manual that covers all of the above information is a daunting task. In fact, many businesses would rather not deal with creating an employee handbook and forego having one altogether. Not having a handbook poses several legal challenges, and can also create unusual situations for your workforce. At Luxa, we provide outsourced HR services, and would be happy to assist you. If you’re having a hard time creating a company handbook, please contact us.


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