As a payroll service provider, it’s your job to provide guidance to your clients and be a trusted advisor. One item each of your client’s needs is an employee handbook. Why do small businesses need an employee handbook?
A well written and comprehensive employee handbook will benefit both the employee and the employer. Employees will gain a better sense of the organization and employers will know that they have made the policies and expectations clear to its workers. Here are some of the specific reasons that every employer should create and maintain an accurate handbook:
1) Introduces Employees to the Organization’s Culture, Mission, and Values
Perhaps the most important aspect of your Employee Handbook is the introduction of new employees to your corporate culture and how they will fit in. This helps to foster a sense of pride and belonging, which studies show will help employees become more productive in a shorter period of time. The introduction section of an Employee Handbook will answer these questions: “What do we do that sets us apart?” “How did the company get here?” “What are we passionate about?” “How can I, as a new hire, become a part of this culture?” The introduction section sets the standard for the employment relationship in general, and provides a guidepost for the remaining policies communicated in the handbook.
2) Communicates to Employees What is Expected of Them
A well-written handbook provides employees with a clear understanding of their responsibilities. The handbook also serves as a compass for the organization’s policies and procedures. For example, it advises employees what the procedures are for requesting time off or a vacation. It advises employees whom they should contact when they have an unscheduled absence (and what the timing should be). It tells employees whom to go to if they have questions about any of the specific policies in the handbook. The handbook also communicates an employee’s general responsibilities regarding safety, timekeeping, reporting, and so on. By providing this clear, accessible information, handbooks ensure companies continue moving in the right direction.
3) Educates Employees About What They Can Expect From Management and Leadership
An employee handbook clarifies company objectives and leadership styles, as well as management best practices, to foster healthy management-employee relationships. It also outlines logistics, such as timekeeping requirements, hours of work, pay periods, and so on. Further, a complete employee handbook advises employees of their various entitlements to federal and state leaves, such as FMLA or Jury Service Leave. These clearly communicated policies help to eliminate confusion and inconsistencies that result when handbooks are silent on these topics.
4) Helps Ensure Key Company Policies are Clearly and Consistently Communicated
No policy is effective if it is practiced inconsistently. A handbook will accurately communicate your organization’s policies regarding employment, conduct and behavior, compensation, and other policies and procedures your organization follows. Most importantly, managers can refer to the handbook when answering questions or making decisions regarding your policies, and ensure their answers and actions are consistent with your policies and best practices.
5) Showcases the Benefits the Organization Offers
Does your organization offer vacations, 401k, health insurance, paid parental leave, or other benefits to employees? Make sure they know about these policies and the eligibility requirements by communicating them in the handbook. A robust benefits package can help you retain your best and brightest employees, so be sure they know about your full suite of offerings by communicating these in the handbook.
6) Ensures Compliance with Federal and State Laws
No matter what state you do business in, or how many employees you have, you will be subject to state and federal employment laws. Your handbook not only communicates these various entitlements and obligations to employees, but is useful in demonstrating that your organization strives to be compliant with these regulations. For example, if your employee is called away to active-duty military service, you will want to be sure they understand their rights and obligations when communicating their need for leave to you. Your Military Leave Policy should clearly define these parameters to the employee. Similar policies should communicate rights and obligations regarding state disability leaves, federal FMLA leave, and other government mandates.
7) Helps Defend Against Employee Claims
Unfortunately, employers should consider it a matter of when, and not if, they will face a lawsuit or similar challenge from a current or former employee. When this happens, one of the most useful documents you can provide your attorney or third party investigator will be a copy of your handbook. A thorough and compliant employee handbook will help to show that the organization had written and distributed policies. The employee’s signed acknowledgement page will show that the employee had an opportunity to familiarize themselves with the organization’s policies, a chance to ask related questions, knew whom they could turn to for help within the organization, and agreed to follow the terms and conditions of employment set forth by the organization.
Do you want to help your clients develop an employee handbook? Ask us about our HR on Demand service that you can offer to your payroll clients.