A sample employee handbook for small businesses

Small Business Employee Handbook Template

Chris Ronzio

December 08, 2020

I bet when you read “employee handbook,” the first thing that came to mind was a dusty old book that makes a loud thunk noise as it hits the desk. Don’t worry – you’re not alone!

But the need for reliable people-driven processes that led companies to write employee handbooks in the first place hasn’t gone away. In fact, all workers – new hires and long term employees included – need to be familiar with your policies and procedures. No exception. 

So, if you’re ready to revamp your employee handbook (or you’re starting from scratch), here’s a template (made with small businesses in mind) to get you going:

What is an employee handbook?

An employee handbook is a one-stop resource for all your company’s knowledge. Policies, processes, and procedures included. And when it comes to keeping your team aligned and accountable, it’s your business’ greatest asset. 

And before you say anything – we know that old school handbooks have earned a bad rep. That they’re typically super dense and that, a lot of the time, no one really reads them. (We get it.)

That’s why we dubbed modern employee handbooks the much sexier sounding “business playbook.” Because they outline all the rules in one place. That way, everyone on your team knows what to do and how they can help your team win!

And if done right, your employee handbook will be where your team goes when they need to know how things are done. 

But 2 things need to happen for it to do this. One, your company employee handbook needs to be up to date. Because plainly put, your team can’t know the right way of doing things when the directions are wrong or (and we shudder) aren’t documented. 

And two, everyone on the team needs to actually read the employee handbook. Meaning, not just a quick skim but actually understand and retain the information. 

🔥 Thousands of companies trust Trainual to keep their employee handbooks up to date and all in one place. Try for yourself.

Is every business required to have an employee handbook?

We really can’t stress enough how beneficial having an employee handbook is for your company (regardless of its size). And how not having one is a huge miss when it comes to keeping your team aligned and accountable. But by law: no, you are not required to have an employee handbook. 

However, a lot of federal and local governments do require that all employers (you included) notify all employees of certain workplace rights. So you’ll need to check to see which laws(both local and federal) apply to your business. 

Typically, you can find these with a few Google searches. Just type “workplace laws” next to wherever your business operates from (city, state, and country) in the search bar. Then, rinse and repeat with “labor laws” and “employment laws.”

For example, the state of Arizona is an “employment-at-will” state. Meaning, at any time and for any reason, a company can let an employee go. Likewise, at any time and for any reason, an employee can decide to move on. The only exception is if both parties signed a contract saying otherwise or there’s another public policy that overrides this one.  

And all Arizona employers are required by law to disclose this (and a few other rights) to their employees – whether or not they have a company employee handbook. 

But with that being said, a handbook would be the perfect place to disclose this information. As well as put everything else your team members need to know so they can succeed.

An employee handbook template

Employee handbook content

Your company employee handbook will be shared and read, well, company-wide. So it’s better to air on the side of caution. Meaning, you’ll want to include everything and anything that your employees need to know.

But we know that’s super broad and not all that helpful. So, if you’re stuck, here’s some of the content you should include in your employee handbook: 

Note: This list is meant to act as a jumping-off point. So you’ll probably need to add (or take away) policies, processes, and procedures to capture everything your team needs to know.

A warm welcome

Every company – regardless of industry – has to welcome their new hires to the business. So page 1 of your employee handbook should be exactly that. A warm and consistent welcome to the team.

If you’re stuck, think through how you would talk to your new hires in person on Day one. You’d probably give them a quick rundown of your business and set expectations for their onboarding. 

So, all of that should go here. Including:

  • A welcome video. No need to overcomplicate this. Just record a quick hello from your CEO that welcomes new hires to your company. That way, everyone has the same introduction (watch our welcome video above)
  • Your founding story. Provide a short overview of company history. This shouldn’t be a long history lesson with lots of dates and names for your employees to remember. Just provide enough information so, if asked, the new employee can confidently and briefly talk about how your company got its start
  • Your vision statement. Describe your company’s vision and purpose. Basically, in a short paragraph (max), explain why your company exists
  • Your mission statement. Don’t forget to describe its significance to your organization. How does your mission frame what you do and how you do it?
  • Your company values. List and describe your company’s core values. Then, explain how they contribute to your success.
  • Your value prop. Include your official value proposition. And be sure to break it down. Why did you choose it? What does it mean for customers? And so on 
  • A walkthrough of your product. Provide a detailed description of your product or service offering. If you have more than one, be sure to separate them out 
  • Introduce your industry. Provide a detailed description of your industry and where your product fits within it. What are the defining characteristics? And what opportunities are there?
  • Your target customer. Provide a high-level description of your ideal customer, rather than a comprehensive review of customer personas

Employment basics

Think of employment basics as your opportunity to define the professional relationship. Meaning, it’s the right place and time to set expectations and make it clear where employees stand with your business. 

And the best way to do that is to be upfront. Whatever questions your team might ask about their employment (and some that they’ll never think to ask), you’ll want to cover here. 

For example:

  • Your employee contracts. Meaning, all the different types of employees your company has clearly defined. Full-time, part-time, intern, seasonal, and contract included 
  • An equal opportunity statement. In a lot of cases, this will be required by law. But if it’s optional in your area, it’s better to air on the side of caution and include it
  • All the local workplace laws. Legally speaking, what do your employees need to know about their workplace rights?
  • Your recruitment processes. This should cover everything from sourcing talent to your company’s referral program to your hiring procedures. Plus, it’s not a bad idea to disclose how your small business runs background checks 
  • Your attendance policy. Expecting your employees to show up every day isn’t always enough. So outright say what is acceptable attendance-wise, what counts as an excused absence, and your process for calling out (when needed)

Workplace policies

When employees feel safe (physically, digitally, and emotionally speaking), they do their best work. It’s just a fact. But you can’t just tell them that you’re looking out for their wellbeing. You need to prove it to them! 

And that starts by explicitly addressing where your company stands on the hard to talk about topics. Diversity, harassment, and public health included. That way, if something happens, there’s no grey area regarding how your company will respond. 

Bare minimum, you’ll need to address:

  • Your diversity and inclusion policy. Be sure to clearly define how your company uses the words “diversity” and “inclusion” 
  • Your confidentiality policy. We don’t blame you for not wanting anyone outside your organization to know how you do what you do. So, set parameters for how your team is expected to keep your sauce secret 
  • Any data protection procedures. Data is like gold nowadays. Without it, lots of aspects of our company would stop working, so it’s important to know what is protected and how (while complying with the General Data Protection Regulations, of course). 
  • Your harassment policy. What harassment looks like in the workplace, a list of behaviors you have zero tolerance for, and further disciplinary actions included. Don’t forget to explain how your team can report harassment they see or experience at work
  • Your violence in the workplace policy. What’s considered violence in the workplace, a list of behaviors you have zero tolerance for, and further disciplinary actions included. And don’t forget to explain how your team can report any violence they see or experience at work
  • All your health and safety need-to-knows. Meaning, every process and policy (even the extenuating circumstances ones) that’s related to keeping your team healthy and safe. How you comply with local laws and accident reporting procedures included

Code of conduct

Everyone should feel comfortable at the office (even if the office is now Zoom). And that starts by setting community-wide guidelines for how everyone is expected to behave at work. 

And while you might be thinking that all your team members are adults (you’re not wrong), they’re also human. So this is one of those better safe than sorry situations. That way, no one’s boundaries accidentally get crossed. 

Minimum, you want to address:

  • Your dress code policy. Even if you don’t have a dress code, you probably don’t want people showing up in athleisure. So what kinds of outfits are appropriate for work?  
  • Your conflict of interest policy. What does a conflict of interest look like at your company? And what disciplinary actions do you take when an incident occurs?
  • Your employee fraternization policy. Go in-depth on your company’s rules around employee relationships and explicitly define what counts as consensual. Most companies are pretty low-key about these things, but you’ll definitely want a few guidelines to avoid any office PDA
  • Your employment of relatives policy. You don’t want anyone getting ahead because of their last name. So, specify when (if at all) and in what capacity family members can work together
  • Workplace visitors procedures. If your company allows visitors, give a quick rundown on how to check them in and what they’re allowed to access. Don’t forget to note that your employee is responsible for their guests

Compensation and development

Let’s be real – as much as your team loves their jobs, they have it for the paycheck. So when it comes to how they get paid, spell it out. 

But not all compensation comes with a paystub. So don’t shy away from all the other awesome ways that you invest in your employees. Such as:

  • A breakdown of compensation statuses. Especially in the US, there’s a lot of laws around how exempt and nonexempt employees are compensated. So be sure your team knows the difference and their legal rights based on which category they fall into
  • Payroll need-to-knows. When your team gets paid and how shouldn’t be a secret. So we highly suggest you give a complete rundown of when employees can expect their paychecks to hit their accounts. 
  • Your compensation policy. By no means is this mandatory. But we believe every company should have an equitable compensation program. One that explains what step your company is taking to dismantle injustice – in regards to compensation.
  • All things raises. You should approach the topic 2 directions. One, by outlining the appropriate times for employees to ask for a raise and circumstances in which they’re granted. And two, how managers can submit employees for a raise. 
  • Your bonus structure. Whether you give bonuses monthly, quarterly, or annually, clearly address when they’re given out and how decided. 
  • Your performance management procedures. Basically, how do you evaluate how your team members are doing? Every employee should know exactly how success is measured. Plus, what to expect when reviews come around. 
  • Any training and development opportunities. A lot of companies offer learning and training opportunities in addition to financial incentives. Take a moment to mention what types of programs are available and how employees can take advantage of them.

Benefits and perks

Benefits and perks refer to everything your company offers that isn’t compensation or development-related. 

But far too often, people don’t know the amazing things their company offers. Or if they do, they’re not sure how the benefits work or how to use the perks. Meaning, you’re left footing the bill for something that’s not getting used. 

So let your team know what your company has to offer. Here are a few of the most common benefits and perks that you would want to mention: 

  • Employee health plans. It’s the big one! Everything your team needs to know about their healthcare options, how to enroll, and what it covers should be broken down. Plus, don’t forget to go over all the relevant laws, including FMLA and COBRA 
  • Workers comp policy. No matter how safe your workspace is, accidents occur. And when they do, you’re legally obligated to compensate for them. So go over all the circumstances that qualify for comp. Plus, which benefits are included, and how someone can apply to get it
  • Work from home policy. These days, almost everyone is working from home. And to make sure your team is actually working while they’re at home, you’ll want to set a few rules and expectations to make sure everything gets done 
  • Employee expenses. Companies often cover the costs for things like business trips, education, and skill development. So you’ll want to really dive into what does and doesn’t count as work-related expenses and how to submit for reimbursements
  • Parking policies. Where to park, whether parking is free, if spots are assigned, and parking lot etiquette included. Plus, any processes your company has for getting an assigned spot or parking pass
  • Every company equipment needs to know. Chances are good that you supply the tools your employees need to succeed (such as laptops). And you want to make sure you get back your equipment back in the same condition as you handed it out. How should employees treat their equipment? And how can they request repairs or replacements?

Working hours and time off

Things feel more manageable when you know when they’re happening and how long they’re going to last. So you never want your team wondering when their next much needed day off is or when they should show up. 

So outline everything they’ll need to strike a work-life balance, such as:

  • All things working hours and PTO. What do your working hours look like? And if someone needs to take a day off, how can they submit for PTO?
  • A list of paid holidays. List any and all holidays your company observes. AKA what days do you employees get off without eating up their time off. And if some of your employees need to work these days, mention how they’ll be compensated
  • Your sick leave policy. Everyone gets a certain number of sick days off by law. Just be sure to explain the right way to call out in these events. And to give your employees peace of mind, let them know what long-term and short-term leave you offer as well
  • Your bereavement leaves policy. Hopefully, most of your employees never need to use this type of time off. But if they need to take time to grieve a death in the family, what can they expect? Do they need to take PTO? And how should they request it?
  • Parental leave policies. What should employees expect when they’re (or their partners are) expecting? Be sure to discuss how many weeks they get to spend with their newest addition to the family as well as anything else they need to know about stepping away or coming back

Employee resignation and termination

While you’d probably like to believe that all your employees are going to stay on your team forever, that’s just not realistic. So when the time comes that someone decides to – or is told to – move on, you want a clear game plan for their last few days. 

And having it in your employee handbook lets your team know what they’re entitled to, should they choose to leave. 

So, bare minimum, you’ll want to touch on:

  • Any progressive disciplinary actions. Outline your company’s specific steps for disciplinary action both from the employee and manager perspectives 
  • Your resignation process. Walk employees and managers through all the steps that need to happen after someone hands in their 2 weeks notice and before their last day
  • Your termination process. Touch on any local laws and the process that your company uses when terminating an employee. And be sure to mention severance pay and how the company reimburses any unused vacation or sick days 
  • Your reference procedure. How does your company handle writing references to employees who leave on good terms?

👉 Starting is the hardest part. That’s why Trainual offers over 100+ employee handbook policy templates to help you get going! Start your free trial to get the templates.  

3 tips for building your employee handbook

Building your company employee handbook can be super daunting. Especially if you’re starting from scratch. 

So I asked Sasha Robinson, Trainual Head of People Ops and a major contributor to our own employee handbook, how you can build a better employee handbook. And here’s what she had to say: 

1. Presentation is everything

Admittedly, employee handbooks are dense. And if all your top plays are just written down and handed to your team, chances are good they’ll gather dust. That’s because it’s not super engaging – especially for adult learners

But by adding multimedia (funny gifs, video how-tos, and infographics), you can take your employee handbook to the next level. Plus, make sure that your team actually gets read. 

That’s because adult learners are more likely to interact with something that keeps their attention – as opposed to making their eyes glaze over. So having a video or graphic that helps break down your important need-to-know can be a huge win. 

🔥 Tip: Quick embeds make building a more engaging playbook easier than ever. Just add a video, photo, gif, or any other type of multimedia by dropping a link.

2. Keep it simple

The last thing you want is for your employee handbook to be filled with legal jargon. Instead, as a general rule of thumb, explain everything so that an 8-year-old can understand it. (Read it to your kid if you have to.)

That way, your employees easily understand everything that’s in your employee handbook. And they’re aligned with your expectations because you clearly communicated all the important need-to-knows.

🔥 Tip: Trainual lets you test that your team understood and retained everything they read in your employee handbook. That way, there’s no question about who knows what.

3. Keep everything in one place

We’re just going to say it: we think you should ditch your old school employee handbook. Especially because chances are good that it’s just a bunch of scattered docs and emails. If it’s written down at all, that is. 

But that’s not helpful! Instead, you want everything written down in one, easy to access spot (okay, we’re biased and think it should be Trainual). That way, you can assign the content in your employee handbook directly to your team members. And hold them accountable for all the important need-to-knows. 

Your team can even reference the content in real-time whenever they have a question about how your company does something. Meaning, they’re more likely to read your employee handbook (sections of it, at least) again and again! Making it a huge win for you!

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