An Employee Handbook Is Your Corporate Instruction Manual

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Employee handbooks are an integral part of any business, and yet they are often overlooked. Do you have a clear policy in place about holiday hours? What about paid time off? Vacation time? Maternity leave?

These are just a few of the questions that need to be answered in an employee handbook. An employee handbook is more than just a list of rules and regulations that your HR department keeps in a bottom drawer. A well-designed employee handbook serves as an instruction manual, and it should be referred to frequently by every employee because it answers everyday questions in detail and it reflects your company’s culture. The employee handbook is Handbookthe first place employees turn to when they have a question about how the company is run. A well-designed employee handbook also will improve operations and help keep the company out of trouble.

Many elements have to be considered when assembling an employee handbook, including employment law, internal operations, policies and procedures, employee safety, and corporate culture. The employee handbook is a necessary tool for compliance with labor laws. You can use standardized employee handbooks that cover the labor rules, but the boilerplate still has to be adapted to meet your company’s unique requirements. How do you address a labor dispute? Is there a written policy for overtime? What about time off for jury duty? Labor laws outline your legal obligations, but that’s the minimum requirement. Your company policies and procedures probably need to go beyond the minimum legal requirement.

Employees are most concerned about benefits and salary, and these are areas where the employee handbook is invaluable. Benefits are changing all the time as new insurance providers are added, tax laws change, and pensions and 401K programs change. The employee handbook details all the specifics about the latest company benefits so employees understand what to expect.

In the case of compensation, the employee handbook is where you spell out policies for overtime, paid vacation, flex time, and other rules relating to compensation. If it’s clearly spelled out in the Employee handbook, there’s little room for argument if an employee says they are being treated unfairly.

If you use it properly, the employee handbook will differentiate your company and help you attract and retain the best talent. For example, tuition reimbursement is a benefit that many companies offer and that many workers appreciate to further their education. Your company may consider offering personal time off instead of sick time or vacation time, and that would be outlined in the employee handbook.

The employee handbook can help minimize company risk as well. Consider, for example, the case of employees who accrue vacation time, but never seem to take a vacation. Once that time is accrued they have to either take the time off or you have to pay the employee for unclaimed vacation time. If you don’t set a cap on the maximum amount of time that can be accrued in the employee manual, the paid-time-off continues to build until either that employee takes a very long vacation, which may affect operations, or they leave and have to be paid for vacation time due, which affects payroll. If you fail to set limits around compensation for time off, you could run into a real cash flow crunch if more than one worker with substantial accrued vacation time leaves the company at the same time.

When creating an employee handbook, you need to cover all aspects of employee policies and procedures, including those that protect your operation, and that you reflect the values of your organization. At Pacific Crest Group we have developed a series of templates that we use with our clients to help them capture what they need to include, and we bring a wide range of experience to create a comprehensive employee handbook for them. Of course, an employee handbook isn’t static, either, but is revised with changes in the law and refined to accommodate changes in corporate policies and procedures.

In the next few blog posts we will explore various elements of the employee handbook, including defining how to use corporate resources, how to address employee discipline and termination procedures, and how a well-defined employee handbook can help protect your business.


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