How to Create an Employee Handbook

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Growing pains are normal. As you move from a small family-run business to a larger organization, you’re bound to encounter some hiccups. Just as Tony Perrigan did. 

Tony is an electrician in Oklahoma who runs Ace Electrical Services. His team works on high-end projects with sensitive data. As his business graduated from a family business to outside hires, he almost learned the hard way what happens when you don’t have an employee handbook.

Employee handbooks are great for employees, but they also protect the company. For Tony, who didn’t have a handbook in place when an employee was fired for multiple absences, a written termination policy would have saved him some trouble. But more on that in a minute.

Learning how to write an employee handbook for a small business takes a bit of planning, but the payoff is worth it. Are your internal policies enshrined in an official manual? If they’re not, you could wind up in a tough position.

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3 Mistakes Companies Make When Documenting Internal Policies

When Tony let his employee go for multiple absences, he assumed he’d heard the last of him. Unfortunately, that former worker filed for unemployment and lied. He said he had been laid off rather than fired for cause. Though Tony was able to prove his case through Facebook messages and texts with time stamps, an employee handbook (when combined with other evidence like time cards) could have served as valuable proof for the state unemployment office that Tony didn’t owe his former worker any unemployment.

People like Tony are not alone. A lot of companies don’t know how to write an employee handbook for a small business and they make some pretty common — but potentially damaging — mistakes. Three common errors when it comes to creating and implementing policies include:

1. Sticking to Verbal Agreements

As you expand your business, you’ll end up hiring people you don’t know. While having things in writing is always important, assuming a verbal agreement will hold up when it comes to outside hires is a risky mistake. If you don’t have a written final warning for an employee, could you really prove to the unemployment office that the employee was fired for cause?

As Tony puts it, “[Not having a handbook] was never an issue while working with family, but when you grow into multiple technicians and really need to start managing employees, an issue will inevitably come up.”

2. Leaving Policies Open to Interpretation

Giving your employees unclear directives is unfair and confusing. Having a clear, written policy leaves no room for interpretation.  

As Tony learned, when things go south in a professional relationship, you don’t know how the other party will interpret/portray the end of their employment. When he created his handbook, Tony added an important policy about attendance that makes it clear termination is on the table when his employees just don’t show up:

4.2 Attendance Punctuality and regular attendance are essential to the successful operation of the Company’s business. If an employee is unable to report to work (or to report to work on time) for any reason, the employee must notify his or her supervisor before his or her starting time. If an employee desires to leave work for any reason during the workday, the employee must obtain the approval of his or her supervisor prior to leaving. Excessive absenteeism or tardiness may subject the employee to disciplinary action, up to and including termination.

3. Poor Communication

Ultimately, your policies are only as good as they are communicated. If you write an employee handbook for a small business and no one reads it, what’s the point? An employee handbook that is not handed out to each and every employee leaves you vulnerable.

All internal policies, especially as they pertain to sensitive issues like vacation days and grounds for termination, should be given to every existing employee when first created or updated in an existing handbook. From then on, make giving out the handbook a part of your orientation process. Be sure your new hires sign something acknowledging they have been given your employee handbook:

At-Will Employment Agreement and Acknowledgement of Receipt of Employee Handbook Employee: _________________ I acknowledge that I have been provided with a copy of the ACE Electrical Services LLC (the “Company”) Employee Handbook, which contains important information on the Company’s policies, procedures and benefits, including the policies on Anti-Harassment/Discrimination, Substance Use and Abuse and Confidentiality. I understand that I am responsible for familiarizing myself with the policies in this handbook and agree to comply with all rules applicable to me.

Best Practices for Creating an Effective Employee Handbook

There is not a one-size-fits-all company handbook, but most have a few vital components. Here are some best practices to keep in mind as you write an employee handbook for a small business.

1. Consult with Legal Experts

Writing a handbook unique to your home services business doesn’t mean penning it from scratch. Tony used Rocket Lawyer to create his handbook. The site provided a template that was easy to follow and allowed him to personalize each section for his industry and type of work.

You can also reach out to an attorney to get some help with finalizing the details. Whether online or in person, enlisting the help of a legal mind means you’re creating a handbook that will hold up when it needs to.

2. Divide Policies into Clear Sections

A long list of employee policies and state laws makes anyone’s eyes gloss over. As you can see below, Tony’s handbook has an organized table of contents and labeled sections. Creating an employee handbook with an easy-to-follow outline means a worker can get to the section they need right away. And you won’t be accused of adding something to the fine print that a reasonable person could miss.

Table of Contents Section 1 – Introduction 1.1 Employee Handbook 1.2 Changes in Policy 1.3 Employment-At-Will Section 2 – Employment Policies 2.1 Employee Classifications 2.2 Equal Employment Opportunity & Americans with Disabilities Act. 2.3 Confidentiality 2.4 Employment of Minors 2.5 Employment of Relatives 2.6 Personnel Records and Employee References 2.7 Privacy 2.8 Immigration Law Compliance 2.9 Political Neutrality

3. Create a Digital Copy

Tony keeps a handbook at each of his jobsites, so employees can always grab it and review it as needed. This strategy may also work for you, or, you could place a copy of the handbook in the glove compartment of every service van.

Each employee should also have their own hard copy of the handbook. You’d also be smart to create a digital copy of the handbook and email it to each new employee or make it available online via an employee portal/HR site when possible. With a digital copy, no employee ever has a reason to say they couldn’t access the handbook when they needed it.

4. Use Direct Language

Specifics are good. Legally binding language is even better. As we already mentioned, ambiguity can spell disaster for a company. Concise, direct wording helps everyone.

Where you think it’s needed, consider adding clarification to mind-bending legalese or confusing state laws. As Tony’s handbook shows, you should also clarify acronyms and give specific timelines whenever possible.

6.3 Workers’ Compensation Leave Any employee who is unable to work due to a work related injury or illness and who is eligible for Workers’ Compensation benefits will be provided an unpaid leave for the period required. The first 12 weeks will be treated concurrently as a family and medical leave under the federal Family Medical Leave Act (“FMLA”) for employees eligible for FMLA leave.

5.  Outline Appropriate Online Behavior

Social media policies can benefit any company. Does anyone want their employee harassing a stranger on the internet, going viral, and being publicly linked to their company? Probably not.

Create a policy that lets your workers know they should behave themselves online in a way that doesn’t embarrass your company. Given that we live in an ever-connected, ever-digital world, having a sound social media policy is increasingly vital.

Here is a part of what Tony’s new social media policy outlines for his workers:

4.9 Social Media Policy ACE Electrical Services LLC is committed to utilizing social media to enhance its profile and reputation, to listen and respond to customer opinions and feedback, and to drive revenue, loyalty and advocacy. We encourage employees to support our activities through their personal social networking channels while adhering to the guidelines outlined in this section.

For the purpose of this section, social media and networking refers to the use of web-based and mobile applications for social interaction and the exchange of user-generated content. Social media channels can include, but are not limited to: Facebook, Twitter, LinkedIn, YouTube, blogs, review sites, forums, online communities and any similar online platforms.

Employees are expected to conduct themselves in a professional manner and to respect the views and opinions of others. The Company and its employees are committed to conducting ourselves in accordance with best industry practices in social networking, to being responsible citizens and community members, to listening and responding to feedback, and to communicating in a courteous and professional manner. Behavior and content that may be deemed disrespectful…

6. Highlight Safety Issues

As a home services provider, addressing safety issues at work is a particularly important objective. On a jobsite, safety could have very immediate and very serious implications. Make sure your employee handbook has a section explaining that employees are expected to report potential hazards. If you can outline the procedure they should use (such as reporting to their immediate supervisor in writing), even better. See a section of Tony’s handbook, about workplace safety, below:

4.5 Safety The Company is committed to providing a safe workplace. Accordingly, the Company emphasizes “safety first.” It is the employee’s responsibility to take steps to promote safety in the workplace and work in a safe manner. By remaining safety conscious, employees can protect themselves and their coworkers. Employees are expected to promptly report all unsafe working conditions, accidents and injuries, regardless of how minor so that any potential hazards can be corrected.

7. Update the Handbook Often

As your business expands, changes policies, and adapts to changing laws, your handbook must evolve. If you change your termination policy but don’t update the handbook: it’s not official. Correct your employee handbook as often as needed. Not only is it fair to keep employees informed, but frequent updates keep your business protected when it comes time to enforce a company policy.



Final Thoughts

As our client Tony almost learned the hard way, your human resources must evolve with your company’s growth. If Tony hadn’t been able to produce Facebook messages and texts to prove his employee had been fired for cause, he would have owed unemployment payments. All because he didn’t have an employee handbook.

Make sure you produce a handbook that you would be able to present to an attorney or state official — because someday you may need to. In the meantime, learn to grow your business with Housecall Pro. Our features make it easy to track an employee’s job completion so you know when they’re not showing up to a call.

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