How To Create an Employee Policies and Procedures Handbook

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Even if your business has just one employee, you need an employee handbook that includes all of your policies, procedures, and benefits. Policies assure that you are treating all employees equitably and fairly, while procedures are the "how-tos" that help you run operations smoothly.

Collecting everything in a handbook and requiring your employees to read it can make your life as a boss easier and your employees more clear, content, and assured.

Be sure to have an attorney who is an expert in the field of employment law help you with your handbook to be certain that there is nothing in it that could cause you problems. Paying an attorney to provide this review could save you from including something that could be misunderstood by a reader.

Creating an Employee Handbook

Your handbook should have several sections, including:

  • Introduction
  • Policies
  • Benefits
  • Procedures


The introduction to your employee handbook should contain more than just a few words about your company. It lets your employees understand the importance of the handbook and includes an area for them to sign to acknowledge they have read the handbook. You might want to include:

  • The history of your business
  • Your statement of purpose or mission statement
  • A welcome letter
  • Statements of the company, including a statement of at-will employment, equal employment opportunity, non-solicitation, and policy against workplace harassment

Include an employee signature document separate from the handbook. Make sure that every employee signs the document stating that they have read and understand the handbook. Include the acknowledgement in each employee's personnel file.

Don't try to write these statements yourself, copy them from the internet, or use a free legal form. Get your attorney to write these statements and the employee signature document to make sure they comply with all state and federal laws.

Employee Policies

The first major section of your employee handbook contains employee policies. These policies give information to employees about your expectations of them.

Attendance and Punctuality

Include a section stating that employees are expected to be at work every day and on time. Define "excessive" absenteeism and "habitual" lateness.

Breaks, Lunch Times, Staff Lounge

Can employees take breaks at any time, or are there specific break times? What about lunch? Describe the protocols for breaks and use of the staff lounge.

Computer Software and Documents

Make employees aware of copyright laws relating to documents. What documents may not be copied? Which software can be copied? Where are the software licenses and what do they say?


State the policies relating to business matters and your company's trade secrets.


Employees should not take gifts from customers except for very small tokens.

Discipline and Termination

Describe procedures for discipline, including warnings, both written and verbal. Include an appeals process, even for a small office, so employees feel they have somewhere to turn to. Describe circumstances under which employment may be terminated. How much notice is given? How is accumulated vacation paid?

Drugs and Alcohol Use; Smoking Policy

State that the use of drugs or alcohol on company premises is cause for immediate dismissal. Do you allow smoking on company premises? if so, where?


Tell employees how and when you conduct performance reviews.

Employee Status: Full-time, Part-time

Describe the weekly hours required for full-time employment (32? 35? 40?). Do full-time employees have benefits (such as health insurance) that part-timers do not? Do part-timers receive paid vacation?

Office/Facility Dress Code

You may want to include a general statement about adherence to dress policies, whether it's business casual or more formal. And if employees are required to wear specific uniforms, who pays for these? Who pays for cleaning?

Orientation and Training of New Employees

Describe your company's program of on-the-job training and orientation. Is orientation time paid?

Pay Periods/Time Sheets/Paychecks/Overtime

How often are employees paid? (Pay periods may be different for salaried and hourly employes.) Emphasize that time sheets/time cards must be maintained by all employees; when must they be turned in? State when employees are eligible for overtime.

Parking for Employees

Describe your parking lot and any restrictions on its use. Do employees need a parking card to enter the lots? How are the lots monitored?

Personal Phone Calls, Social Media Use, and Visitors

Describe your policies on visitors and on using social media and making personal phone calls on company time.

Probationary Period

It's a good idea to include a period of time, usually not more than 90 days, during which a new employee is evaluated and the employment is "temporary" or "at will." You can adjust pay after this probationary period to provide an incentive to a new employee.


You can request that an employee who wishes to resign to give you at least two weeks' notice.

Weather Days

Describe how and when you will notify employees if the business is closed for bad weather. Include a statement on how you will treat employee time off for weather when the business remains open.

Employee Benefits

Paid Time Off (Vacations, Personal Time, Sick Days)

There's no federal law that requires you to pay an employee for time off, including vacations, personal time, or sick time, but some states have requirements for giving employees time off. There are a number of ways to decide how to handle these time off issues. Talk to a human resources specialist or your attorney.


No federal law requires holiday pay; if your business is closed for a holiday, you do not need to pay for this time. What paid holidays do you provide? List specific holidays for each year. You may decide to change the holidays from year to year, but usually, you will need to maintain the same number. Should you require employees to work the day before and the day after a holiday in order to receive holiday pay? You don’t need to pay part-time employees for holidays, even if full-time employees receive them.

Jury Duty

The Fair Labor Standards Act doesn't require payment for time off, including jury duty. Some states require employers to pay employees who are asked to serve on juries.

Leaves of Absence

Although you do not have to provide paid leave under the provisions of the Family Medical Leave Act. but some leaves are FMLA protected if they are for specific purposes.

Military Leave

How will you deal with employees who are called to active duty? See this article about the Uniform Services Employment and Reemployment Rights Act (USERRA) and talk to your attorney about employer requirements.

Waiting Periods

Must employees wait a certain time to receive benefits? Can probationary employees begin to accrue (accumulate) benefits?

Employee Procedures

In this section, list all of the common procedures employee participate in, including:

  • Financial and accounting
  • Payroll processing
  • Administrative
  • Sales
  • Marketing and publicity
  • Inventory, shipping, and purchasing

Two Final Steps

Check back with your legal team to be sure everything is correct and that it complies with all state and federal laws.

Then, print copies of your handbook and distribute them to all employees. Make sure you get a signature from everyone stating that they've read and understand everything. Keep those signatures on file.