Why should I create an employee handbook?

Misbah Jalal Siddiqui

Why should I create an employee handbook?

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Employee Handbook

Employee handbooks aren’t a requirement in many states, but having one is something firms of every size should consider. Meant to address policies, procedures, guidelines, and working requirements, employee handbooks can be a cornerstone document for any company. Having one to refer back to makes it easier on everyone, including the employees who have something to reference and the managers who have clear documentation of firm expectations and policies.

Streamline the on-boarding process

Employees often have a lot of questions when they start a new job. It can be extremely helpful to have clear answers to many common questions, such a time off/vacation policies and dress code requirements. While firms likely already have many of these in place, having them spelled out and documented is especially helpful for new employees who are getting a lot of information as they start.

Set expectations

Employee handbooks can be effective tools for letting your staff know what’s expected of them. Without communicating it, it can be hard for them to know what the firm is looking for[1]; and even harder to enforce these expectations. When they’re written in the employee handbook, it’s clear for everyone.

Reduce liability

Having the right policies in place can help protect from lawsuits related to preferential treatment, wrongful termination, and harassment. With the proper training and complaint procedures in place, the handbooks can help defend a claim of exercising reasonable care and due diligence in the prevention of certain behaviors. It’s important to make sure employees sign off on both receipt and understanding of the contents of the handbook[2] for this to be a useful defense.

The majority of employee handbooks include[3]:

  • Vacation policy, including procedure for how to request time off
  • At-will employment clause (if applicable)
  • Confidentiality agreement
  • Non-compete agreement
  • Non-discrimination policy
  • Benefits and compensation policy
  • Harassment policy and complaint procedure
  • Code of conduct, including dress code, ethics, attendance, and office safety

If you use a payroll company, such as ADP or Paychex, they often provide services or templates for employee handbooks. Even if you have to create one from scratch, an employee handbook can go a long way toward creating consistent, clear policies that offer guidelines for employees and managers while offering a layer of defense in the event of an employment lawsuit.


1. Employee Success Depends on Clear Expectations from Leaders
2. Employee Handbooks: The Importance of Signed Acknowledgments
3. What to Include in an Employee Handbook

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