Even with five employees, you need an employee handbook. It sets expectations on day one, keeps policies consistent, and protects you when disputes arise. This guide gives you the full structure of a small-business handbook — the same framework inside our free HR Starter Kit.
What to include in your handbook
- Welcome and company overview. A short welcome letter, your mission, and what the company does. Keep it human — this is the first page new hires read.
- Employment basics. Your at-will employment statement (where applicable), equal employment opportunity policy, and how employment classifications work (full-time, part-time).
- Code of conduct. Expected behavior in plain language: professionalism, respect, conflicts of interest, dress code if you have one.
- Attendance and punctuality. Work hours, how to report an absence, what counts as excessive absenteeism, and consequences.
- Compensation. Pay schedule, payday frequency, overtime policy, and how raises and reviews work.
- Benefits overview. Health insurance, retirement, and any perks — with a note pointing employees to the full plan documents for details.
- Leave policies. Vacation, sick leave, holidays, parental leave, and FMLA basics if you have 50+ employees. (State sick-leave laws vary — check your state.)
- Anti-harassment and complaint procedure. A clear statement that harassment is prohibited, examples of prohibited conduct, and exactly how to report it — including a path that bypasses the employee’s direct manager.
- Workplace safety. Your commitment to a safe workplace, how to report hazards or injuries, and workers’ compensation basics.
- Technology and social media. Acceptable use of company devices, data security basics, and social media guidelines.
- Discipline and termination. How progressive discipline works at your company and that employment remains at-will.
- Acknowledgment form. A sign-and-date page confirming the employee received and read the handbook. Keep signed copies in personnel files.
What to leave out
- Rigid promises (“you will always receive two warnings before termination”) that undermine at-will employment.
- Policies that contradict themselves in different sections.
- Anything copied from another company’s handbook without reviewing it against your state’s laws.
How to customize it in an afternoon
- Start with the 12 sections above as your skeleton.
- Fill in your actual practices — write what you really do, not what sounds good.
- Add state-specific items (final pay rules, sick leave, non-compete limits).
- Have an employment attorney review it once. This is the highest-ROI legal spend a small business makes.
- Roll it out: distribute, collect signed acknowledgments, and review it every year.
Get the full template: Our Free HR Starter Kit includes a customizable employee handbook template plus 25+ checklists and forms.
This guide is general information, not legal advice. Have an employment attorney review your handbook before distributing it.