What Small Business Owners Should Know About Employee Handbooks

reviewing contract

Before hiring employees, a Tennessee business owner should create an employee handbook. The Houston Business Journal explains that this compilation of the company’s policies and procedures provides a number of benefits, including reducing employer liability.

The business owner should tailor the handbook to the company. All policies and procedures need to match the actual company practices so there are no inconsistencies. Although the handbook may seem like a contract of sorts, placing contract clauses such as noncompete or arbitration agreements within the document may make them unenforceable. These should be addressed separately in employment contracts.

According to SCORE, there are several key elements that belong in the employee handbook. These include the following:

  • The values, mission statement and goals of the company
  • General employment information such as hiring policies and performance review procedures
  • Policies that prohibit discrimination, harassment and retaliation and provide employees with a process for reporting such behaviors
  • Employee conduct expectations such as dress code, ethics policies, conflict resolution and data privacy
  • Employee benefits such as health insurance and retirement plans, paid time off and training benefits
  • The disciplinary process

The handbook will set the tone for your company culture, which could have a significant effect on your ability to draw and retain good employees.

There are state, local and federal laws that may apply to your policies and procedures, such as leave laws, wage and hour laws and others. It is important to understand how these apply and to keep up with the frequent changes so policies and procedures can be amended for compliance.

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