MODEL EMPLOYEE HANDBOOK FOR SMALL BUSINESS
MODEL EMPLOYEE HANDBOOKFOR SMALL BUSINESS
INTRODUCTIONThe NFIB Legal Foundation is pleased to provide you with this Model EmployeeHandbook for Small Business. This handbook is intended to assist you in creating yourown custom employee handbook. The actual polices and procedures of your businessmay vary due to the size of the company, the number of employees, benefits offeredand other factors. The handbook is therefore intentionally broad, and should bemodified and supplemented to accurately reflect your individual company’s needs.While the information provided within this handbook is intended to be complete andaccurate, it should not be considered legal advice. Employment laws vary from state tostate, and it would be impracticable to provide a detailed employment handbooktailored to each locale. The authors and publishers cannot be held responsible for anyerrors or omissions. This handbook is provided with the understanding that neither theauthors nor the publishers are supplying legal or professional advice.The guidance and participation of a good attorney is invaluable when creating aneffective employee handbook. For more information, contact an employment attorneylicensed to practice in your area. If you need assistance in finding an attorney, visit theAmerican Bar Association Lawyer Referral Service at www.abanet.org/legalservices/lris/directory.html or contact (800) 285-2221 for your state or county bar association.The NFIB Legal Foundation is a 501(c)(3), nonprofit, public interest law firm dedicatedto the principles of justice and equity for small business. The Legal Foundation protectsthe rights of America’s small-business owners by providing guidance on legal issuesand by ensuring that the voice of small business is heard in the nation’s courts. TheLegal Foundation does not rely on NFIB Member dues. Rather, the Foundation issupported through individual contributions. For more information on the Foundation’scourtroom activity or how to support this worthy cause, please call (800) 552-6342 orvisit the “Get More Involved” section of the NFIB’s homepage at www.nfib.com.National Federation of Independent Business1201 F. Street NW, Suite 200 * Washington, DC 20004 * 202-554-9000
The purpose of an employee handbook is to orient new employees with the company. Itis a resource that provides answers for the most frequently asked employee questions.Besides informing new employees about company policy, a good handbook emphasizesthe at-will nature of the employment and the company’s disciplinary and terminationrights. Most importantly, it is a declaration of the employer’s rights and expectations.To prepare a handbook, review your company’s policies. Decide which policies arefundamental, which need adjustment and which should be removed. This modelhandbook is intended to help in that review process. In addition, the model handbookmay include policies that your company does not. In some cases, a specific policy thathas been included in the model handbook might not apply to your company. Forinstance, if your company does not offer health insurance to your employees, youwould not include a section on health insurance or COBRA. At a minimum youremployee handbook should contain the following six items: (1) an employment at-willdisclaimer (section 1.3); (2) a statement regarding equal employment opportunity(section 2.1); (3) a policy prohibiting unlawful discrimination and harassment (section2.2); (4) a section that describes the policy for use of company property and privacyrules (section 3); (5) a section on employment classification and overtime rules(section4); (6) a policy on Family and Medical Leave if you have 50 or more employees(section 6.3); and (7) a section on Safety (section 9). You should also consider includinga disciplinary guideline (section 8).Throughout the handbook, you will note symbols similar to this. These symbolsindicate a helpful tip or legal alert. Many of the topics covered in the handbookare legal in nature, but not all sections have a symbol. If you are unsure orunfamiliar with a section, research the law, contact the proper agency or consultan attorney.i
Table of Contents1. Welcome1.1.History, Goals & Culture1.2.Purpose of Handbook1.3. At-Will Employment2. Workplace Commitments2.1. Equal Opportunity Employment2.2. Non-Harassment / Non-Discrimination2.3.Drug Free / Alcohol Free2.4. Open Door Policy3. Company Policy and Procedures3.1.Code of Professional Conduct3.2.Dress Code3.3. Payday3.4. Company Property3.5. Privacy3.6. Personnel Files4. Employment Classification4.1. Exempt4.2. Non-Exempt4.3.Part-Time, Full-Time or Temporary Status5. Attendance Policies5.1.General Attendance5.2.Tardiness5.3.Breaks6. Leave Policies6.1. Vacation6.2.Sick Leave6.3. Family and Medical Leave Act6.4. Holidays6.5.Jury Duty6.6. Voting6.7. Military Leave6.8.Leave of Absenceii
7. Work Performance7.1. Expectations7.2.Reviews7.3. Insubordination8. Discipline Policy8.1. Grounds for Disciplinary Action8.2.Procedures8.3. Termination9. Employee Health and Safety9.1. Workplace Safety9.2. Workplace Security9.3.Emergency Procedures10. Benefits10.1. Health Insurance10.2. Retirement Plans10.3. Worker’s Compensation10.4. Disability11. Termination Policies11.1. Voluntary Termination11.2. Final Paycheck11.3. COBRA Continuation of Benefits11.4. Exit Interview12. Acknowledgments of Receipt12.1. Employee Copy12.2. Employer CopyUsing a table of contents with section indicators rather than justpage numbers makes the handbook easy to update. Begin newsections on a new page, leaving room for future adjustments ifpossible.iii
Section 1 - Welcome1.1History, Goals & CultureThis section should welcome the new employee and introduce them tothe character of the company. Write briefly about how the companybegan and who is in charge. Describe the company’s goals, philosophyand core principles. Avoid describing the company like a family, as thatmight imply indefinite employment.1.2Purpose of this HandbookThis handbook has been prepared to inform new employees of the policies andprocedures of this company and to establish the company’s expectations. It is not allinclusive or intended to provide strict interpretations of our policies; rather, it offers anoverview of the work environment. This handbook is not a contract, expressed orimplied, guarantying employment for any length of time and is not intended to inducean employee to accept employment with the company.The company reserves the right to unilaterally revise, suspend, revoke, terminate orchange any of its policies, in whole or in part, whether described within this handbookor elsewhere, in its sole discretion. If any discrepancy between this handbook andcurrent company policy arises, conform to current company policy. Every effort will bemade to keep you informed of the company’s policies, however we cannot guaranteethat notice of revisions will be provided. Feel free to ask questions about any of theinformation within this handbook.This handbook supersedes and replaces any and all personnel policies and manualspreviously distributed, made available or applicable to employees.1.3At-Will EmploymentEmployment at this company is at-will. An at-will employment relationship can beterminated at any time, with or without reason or notice by either the employer or theemployee. This at-will employment relationship exists regardless of any statements byoffice personnel to the contrary. Only [enter authorized person’s name] is authorized tomodify the at-will nature of the employment relationship, and the modification must bein writing.Sections 1.2 and 1.3 are essential items for a handbook. Employers arevulnerable to lawsuits if they do not provide statements regarding the noncontractual nature of the handbook or at-will employment. Employees shouldalso agree to these terms on the “Acknowledgment of Receipt” form. Somestates limit the terms of at-will employment, so consult with an employment 1attorney regarding your state’s laws.
Section 2 – Workplace Commitments2.1Equal Opportunity EmploymentThis company is an equal opportunity employer and does not unlawfully discriminateagainst employees or applicants for employment on the basis of an individual’s race,color, religion, creed, sex, national origin, age, disability, marital status, veteran statusor any other status protected by applicable law. This policy applies to all terms,conditions and privileges of employment, including recruitment, hiring, placement,compensation, promotion, discipline and termination.Whenever possible, the company makes reasonable accommodations for qualifiedindividuals with disabilities to the extent required by law. Employees who would liketo request a reasonable accommodation should contact [enter authorized person’sname].Several laws enforced by the U.S. Equal Opportunity Employment Commissionprohibit workplace discrimination. The Americans with Disabilities Act requiresemployers to provide, among other things, reasonable accommodations toqualified individuals with disabilities unless to do so would cause an unduehardship to the company. Include an equal opportunity statement and adisability statement to exhibit that your company observes these laws. Thecompany should be aware of state and/or local laws which provide greaterprotection than the federal discrimination laws, such as recognizing additionalprotected classes beyond those protected by federal statute.2.2Non-Harassment Policy / Non-Discrimination PolicyThis company prohibits discrimination or harassment based on race, color, religion,creed, sex, national origin, age, disability, marital status, veteran status or any otherstatus protected by applicable law. Each individual has the right to work in aprofessional atmosphere that promotes equal employment opportunities and is freefrom discriminatory practices, including without limitation harassment. Consistentwith its workplace policy of equal employment opportunity, the company prohibits andwill not tolerate harassment on the basis of race, color, religion, creed, sex, nationalorigin, age, disability, marital status, veteran status or any other status protected byapplicable law. Violations of this policy will not be tolerated.Discrimination includes, but is not limited to: making any employment decision oremployment related action on the basis of race, color, religion, creed, age, sex, disability,national origin, marital or veteran status, or any other status protected by applicablelaw.2
Harassment is generally defined as unwelcome verbal or non-verbal conduct, basedupon a person’s protected characteristic, that denigrates or shows hostility or aversiontoward the person because of the characteristic, and which affects the person’semployment opportunities or benefits, has the purpose or effect of unreasonablyinterfering with the person’s work performance, or has the purpose or effect of creatingan intimidating, hostile or offensive working environment. Harassing conductincludes, but is not limited to: epithets; slurs or negative stereotyping; threatening,intimidating or hostile acts; denigrating jokes and display or circulation in theworkplace of written or graphic material that denigrates or shows hostility or aversiontoward an individual or group based on their protected characteristic.Sexual harassment is defined as unwelcome sexual advances, requests for sexual favorsand other verbal, visual or physical conduct of a sexual nature, when:1.2.3.submission to such conduct is made either explicitly or implicitly a termor condition of an individual’s employment;submission to or rejection of such conduct by an individual is used as thebasis for employment decisions affecting such individual; orsuch conduct has the purpose or effect of unreasonably interfering with anindividual’s work performance or creating an intimidating, hostile oroffensive working environment.Examples of sexual harassment include: unwelcome or unsolicited sexual advances;displaying sexually suggestive material; unwelcome sexual flirtations, advances orpropositions; suggestive comments; verbal abuse of a sexual nature; sexually orientedjokes; crude or vulgar language or gestures; graphic or verbal commentaries about anindividual’s body; display or distribution of obscene materials; physical contact such aspatting, pinching or brushing against someone’s body; or physical assault of a sexualnature.Reporting:Any company employee who feels that he or she has been harassed or discriminatedagainst, or has witnessed or become aware of discrimination or harassment in violationof these policies, should bring the matter to the immediate attention of his or hersupervisor or [enter name of alternative person to whom employees can report]. Thecompany will promptly investigate all allegations of discrimination and harassment,and take action as appropriate based on the outcome of the investigation. Aninvestigation and its results will be treated as confidential to the extent feasible, and thecompany will take appropriate action based on the outcome of the investigation.3
No employee will be retaliated against for making a complaint in good faith regarding aviolation of these policies, or for participating in good faith in an investigation pursuantto these policies. If an employee feels he/she has been retaliated against, the employeeshould file a complaint using the procedures set forth above.It is important for employers to implement non-harassment policies, including aprovision regarding reporting procedures. To the extent that an employee fails toreport harassment by a co-employee as required by an established policy, thismay be a possible defense in response to a legal action initiated by theemployee. Once in place, the company should make sure that the policy iscarried out, including prompt investigation of claims of discrimination andharassment.2.3Drug-Free / Alcohol-Free EnvironmentEmployees are prohibited from unlawfully consuming, distributing, possessing, selling,or using controlled substances while on duty. In addition, employees may not be underthe influence of any controlled substance, such as drugs or alcohol, while at work, oncompany premises or engaged in company business. Prescription drugs or over-thecounter medications, taken as prescribed, are an exception to this policy.Anyone violating this policy may be subject to disciplinary action, up to and includingtermination.2.4Open Door PolicyThe company has an open door policy and takes employee concerns and problemsseriously. The company values each employee and strives to provide a positive workexperience. Employees are encouraged to bring any workplace concerns or problemsthey might have or know about to their supervisor or some other member ofmanagement.4
Section 3 – Company Policies and Procedures3.1Professional ConductThis company expects its employees to adhere to a standard of professional conductand integrity. This ensures that the work environment is safe, comfortable andproductive. Employees should be respectful, courteous, and mindful of others’ feelingsand needs. General cooperation between coworkers and supervisors is expected.Individuals who act in an unprofessional manner may be subject to disciplinary action.3.2Dress CodeAn employee’s personal appearance and hygiene is a reflection on the company’scharacter. Employees are expected to dress appropriately for their individual workresponsibilities and position.This section may be expanded to include the specific requirements of yourcompany. Include information regarding uniforms, safety protections such assteel toe shoes or hairnets, or other dress requirements. If the company providesuniforms, consider including a caveat about lost uniform charges or laundry.3.3PaydayPaychecks are distributed every [dates] after [time]. If the pay date lands on a holiday,paychecks will be distributed on the closest business day before the holiday.The paycheck will reflect work performed for the [enter pay period dates, commissionperiod dates, etc.] period. Paychecks include salary or wages earned less anymandatory or elected deductions. Mandatory deductions include federal or statewithholding tax, and other withholdings. Elected deductions are deductions authorizedby the employee, and may include, for example, contributions to benefit plans.Employees may contact [enter authorized person’s name] to obtain the necessaryauthorization forms for requesting additional deductions from their paychecks.Notify a supervisor if the paycheck appears to be inaccurate or if it has been misplaced.The company reserves the right to charge a replacement fee for any lost paychecks.Advances on paychecks [are/are not] permitted. Information regarding final paycheckscan be found under the termination section of this handbook.5
Any change in name, address, telephone number, marital status or number ofexemptions claimed by an employee must be reported to [enter authorized person’sname] immediately.Companies should consult state and local law for wage payment requirements,such as means of payment (including opportunity to pay by direct deposit),timeframe for paying wages, and information that must be included on paycheckstubs.3.4Company PropertyCompany property, such as equipment, vehicles, telephones, computers, and software,is not for private use. These devices are to be used strictly for company business, andare not permitted off grounds unless authorized. Company property must be used inthe manner for which it was intended. Upon termination, employees are required tosurrender any company property they possess.Company computers, internet and emails are a privileged resource, and must be usedonly to complete essential job-related functions. Employees are not permitted todownload any “pirated” software, files or programs and must receive permission froma supervisor before installing any new software on a company computer. Files orprograms stored on company computers may not be copied for personal use.Phones are provided for business use. The company requests that employees notreceive personal calls while on duty. If urgent, please keep personal calls to a minimumand conversations brief. Personal long distance calls are not permitted.Employees are reminded that they should have no expectation of privacy in their use ofcompany computers or other electronic equipment.Violations of these policies could result in disciplinary action.Companies may institute a policy of “business use only.” Alternatively, acompany may adopt a less stringent policy which advises employees thatcomputers and phones are provided for business use, and any personal usemust be kept to a minimum and must not interfere with work responsibilities.Companies should develop a policy specific to their own computer systems thatprotects against employee misuse and the computer viruses that may result fromdownloading outside materials.6
3.5PrivacyEmployees and employers share a relationship based on trust and mutual respect.However, the company retains the right to access all company property includingcomputers, desks, file cabinets, storage facilities, and files and folders, electronic orotherwise, at any time. Employees should not entertain any expectations of privacywhen on company grounds or while using company property.All documents, files, voice-mails and electronic information, including e-mails andother communications, created, received or maintained on or through companyproperty are the property of the company, not the employee. Therefore employeesshould have no expectation of privacy over those files or documents.If you plan to enforce a privacy policy, ensure that you are very explicit aboutwhat the company expects. Privacy laws are relatively new and vary from stateto state. Consult with an employment attorney regarding your state’s privacylaws.3.6Personnel FilesThe company maintains a personnel file on each employee. These files are keptconfidential t
The NFIB Legal Foundation is a 501(c)(3), nonprofit, public interest law firm dedicated to the principles of justice and equity for small business. The Legal Foundation protects the rights of America’s small-business owners by providing guidance on legal issues and by ensuring that the voice of small business is heard in the nation’s courts .
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