Many small business owners may not believe it is necessary to have a formal employee handbook. True, handbooks take time and energy to develop and must be updated on a regular basis. It may seem much easier to simply express company policies verbally, especially if you have a limited number of employees. However there are many reasons why you, as a business owner, should consider devoting some time to creating a handbook.

Help you Formulate Policies

Many new business owners do not have their employee policies set in stone. If you are new to managing employees, you may try to “wing it” and simply formulate policies as you go. Having a handbook will force you to sit down and develop your policies right from the start, so they are applied evenly and fairly to all employees.

Preventing Miscommunication

Misunderstandings may happen even in extremely friendly work environments. What you tell one employee may unintentionally differ slightly from what you tell another employee. Slight differences may be just enough for an employee to believe you are unfairly applying different policies to different people. Having each employee read the same, written policy with the exact same verbiage can help prevent disagreements, misunderstandings, or even legal claims.

Help with Employee Control

Many owners believe a formal handbook does not fit in with the casual, laid-back atmosphere of their small business. However, employees often tend to take advantage of casual, laid-back workplace atmospheres. If there is no formal policy expressed on punctuality or absenteeism, employees may try to push the envelope and claim ignorance once they are approached. Having a written policy informs employees of your expectations of them from the beginning so they cannot take advantage of your casual vibe.

Legal Protections

In the unfortunate event that an employee brings a legal claim against you, you want to have evidence that your business had a fair policy on the subject at hand. An employee handbook can serve as concrete evidence of your company’s policies in court.

While creating a handbook may seem daunting, the finished product does not have to be complicated or lengthy. However, some basic topics that you should cover include:

  • Introduction/Description of the business
  • Expectations for work hours and schedules
  • Wage/Salary/Compensation Policies
  • Description of benefits
  • Company policies regarding drug and alcohol use and workplace behavior
  • Anti-discrimination and harassment policies
  • Attendance and discipline
  • Tolerated use of electronic communications
  • Procedures for employee complaints

Finally, your handbook should have a disclaimer that it does not cover all potential workplace situations, and that employees may be disciplined or terminated for reasons outside of the handbook.

Having an employee handbook will help you define consistent workplace policies, inform your employees, administer the policies fairly and evenly, and protect yourself should a legal situation arise. For these reasons, employee handbooks are beneficial even for businesses with even a handful of employees. If you need help developing policies or a handbook, contact a small business attorney for assistance today.

- Claire Kalia

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