How to Create an Employee Handbook

Background Information

When selecting the state of employment, remember that employment law varies drastically between states. This means that you will need to create a separate employee handbook for each state where your company has employees. The effective date is the official date that the policies in this handbook take effect as to the employees who receive a copy and sign the acknowledgment on the last page.

Number of Employees

For this step you will indicate whether or not this handbook will be used at a location that employs 50 or more employees working within 75 miles of that work site. Answering “Yes” here will simply enter the required disclosures under the Family and Medical Leave Act (FMLA) and require your company to provide the notices specified in the Act. More information is available on the Department of Labor’s website.

Employment Status

This question allows you to specify the employees that will be considered full-time workers. Full-time employees typically work at least 35 or 40 hours per week. Those working less than the amount that you specify will be considered part-time employees. Part-time employees are often not eligible for certain benefits. However, you may still allow part-time employees to receive certain benefits, which will be based off your company’s official policy documentation for each specific benefit offered to full- and part-time employees.

Payroll Information

In this section you will specify employee compensation:

• How often employees will be paid
• When each payday will fall
• The method(s) of payment
• Your policy on pay advances

It is important to note that state law may impose requirements on payment frequency depending on the occupation, industry, or other factors. Therefore, be sure to check whether your state law imposes a payment frequency on your company.

Smoking Policy

You have the option of specifying which areas of company premises employees are allowed to smoke in. Note that any areas you specify must be in conformance with state law. Most states prohibit smoking inside company facilities, but there may be additional restrictions as to outside areas as well.

Meal and Rest Breaks

Our employee handbook will automatically include information regarding the minimum amount of any meal or rest breaks required by your state. If your state requires one or both of these, your company may still allow more than the state minimum. If your state does not require these, the form builder will give you the option of allowing these breaks.

Benefits Offered

Besides health insurance and workers compensation insurance, most benefits are typically discretionary. Federal law requires employers with 50 or more employees to provide health insurance to full-time employees, and state law may impose requirements on smaller employers. Likewise, workers' compensation insurance is typically required for all employers under their respective state laws unless they are very small or some other special exemption applies. Be sure to check your state laws if you think you may be exempt from providing these benefits. Finally, the policy will note that the company provides disability insurance the following states:

• California
• Hawaii
• New Jersey
• New York
• Rhode Island

Performance Reviews

Requiring performance reviews is often an effective way to incentivize good behavior and strong job performance among employees. Our form builder allows you to specify whether you want to require performance reviews, and, if so, how often they will occur. Since employees often will want to discuss their performance periodically, this section will help require supervisors to monitor performance and provide constructive feedback on employee strengths, weaknesses, and opportunities for improvement. If you choose to not require performance reviews, the handbook will still advise employees that they are free to discuss their performance informally with their supervisors.

Paid Leave Offered

When choosing the types of paid time off (PTO) or leave your company will offer, you will have the option of selecting between offering a lump sum of paid leave to be used for sick, vacation, and/or personal leave as needed by the employee or you can choose to provide specific amounts of leave for each of these (sick, vacation, and personal). Note that if you select to offer a lump sum of paid leave, then you must at least offer any minimum amount of sick leave your state may require. The helper text next to the relevant question will tell you if your state requires a minimum amount of sick leave.

Also note that you may still choose to provide any required sick leave upfront at the beginning of the year as an "allotted" amount, instead of having employees "accrue" the leave over the course of the year. Even if you choose to provide an "allotted" number of days of lump sum PTO at the beginning of each year, you will still be asked for the maximum days of PTO an employee may "accrue." Don’t be confused by this use of "accrue," as PTO days can be both allotted (each year) and then accrue (from year to year) if you indicate that unused PTO days should not be forfeited at the end of each year.

Final Steps

Print a copy of the employee handbook for each employee and have him or her sign the Employee Acknowledgments page at the end. Be sure to retain a copy of the Employee Acknowledgments page in each employee's personnel file.

Besides providing employees with copies of this employee handbook as well as any updates to it, various state and federal laws may require you to post relevant information regarding employee rights in conspicuous places in the work setting, including specific leave and benefits rights. These notices are usually available for free online.

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