Does a small business legally need an employee handbook?

Not every small business is required to have an employee handbook. However, employers may be required to provide employees with certain notices or policies depending on their location, size, and circumstances. A handbook can also be useful even when one isn't specifically required.

How many employees should a business have before creating a handbook?

There isn't one employee number that works for every business. A handbook becomes more useful when informal communication is getting harder, managers need consistent guidance, or the business has policies and expectations that employees need to understand.

Can I create my own employee handbook?

Yes. Many businesses start with a template or create their own handbook. The important part is making sure the policies are appropriate for your business, reflect what you actually do, and account for requirements that apply where your employees work.

How often should an employee handbook be updated?

There isn't one schedule that works for every employer. It's a good idea to review your handbook periodically and whenever there are meaningful changes to your business, policies, benefits, workforce locations, or applicable requirements.

Do employees need to sign the handbook?

Employers commonly use a handbook acknowledgment to document that an employee received the handbook and understands their responsibility to review and follow applicable policies. The acknowledgment should be appropriate for the handbook and the business.

Does My Small Business Need an Employee Handbook?

You may not need a complicated handbook. But as your team grows, having important policies and expectations in one place can make managing employees much easier.

A good handbook should reflect how your business actually operates, help employees understand what to expect, and give managers something consistent to work from.

Let's Talk About Your Handbook

Already have a handbook? Keep reading to see what may be worth reviewing.

Do Small Businesses Have to Have an Employee Handbook?

There isn't one simple rule that says every small business must have an employee handbook.

Whether you need one depends on your business, where your employees work, the policies that apply to you, and how you're currently communicating important information.

But there is a difference between being required to have a handbook and finding one useful.

As your team grows, more questions start coming up. How does time off work? What happens when someone is late? What holidays are paid? Who should employees talk to if they have a concern? What are the expectations around company equipment, remote work, workplace conduct, or other issues?

A handbook gives you one place to communicate many of those answers.

Signs a Handbook May Be Worth Putting in Place

Employees are getting different answers

Managers may be handling similar situations differently, or employees may get different information depending on who they ask.

Your policies live in several different places

Some are in emails, some are in offer letters, some are in someone's head, and some may not be written down at all.

You're hiring more often

As more people join the company, it becomes harder to rely on everyone learning expectations informally.

Managers need something consistent to work from

A handbook can give managers a common starting point when employees have questions about company policies.

Your business has changed

You may have added benefits, changed time off practices, added remote work, hired employees in another state, or simply outgrown the policies you started with.

None of these mean your HR is broken. They may simply mean your business has reached the point where a little more structure would help.

What Should a Small Business Employee Handbook Include?

The exact policies will depend on your business, but a small business handbook will often address areas such as:

Employment basics and classifications

Workplace expectations and conduct

Attendance and work schedules

Pay practices and timekeeping expectations

Time off and leave

Workplace safety

Paid holidays and other benefits

Company equipment and technology

Equal employment opportunity and harassment policies

Confidentiality and workplace privacy

Employee concerns and reporting

Your handbook may need more or less than this.

Separation from employment

The goal isn't to include every policy you can find. It's to include the policies your business needs and make sure they actually fit how you operate.

Can I Just Use an Employee Handbook Template?

Yes. A good template can be a very useful starting point.

The problem isn’t using a template. The problem is assuming the template is finished.

A template doesn’t know how much PTO you provide, how employees request time off, what holidays you observe, whether employees work remotely, how your managers handle attendance, where your employees work, or dozens of other details specific to your business.

Use a template as the foundation. Then make sure the policies reflect what you actually do.

Read: Can a Small Business Use an Employee Handbook Template?

Already Have a Handbook?

Having one is a great start.

The next question is whether it still fits your business.

It may be worth reviewing if your company has grown, your benefits or policies have changed, you've hired employees in new states, managers aren't following the policies consistently, or the handbook simply hasn't been looked at in a while.

You don't necessarily need to start over.

Sometimes a review and targeted updates are all that's needed.

What I Look at When Helping a Business With Its Handbook

I don't start by assuming your entire handbook needs to be rewritten.

I want to understand your business first.

How do employees actually work? What benefits do you provide? How do you handle time off? What expectations matter to you? Where are your employees located? What questions keep coming up?

Then we can look at what you already have, what needs to be added or updated, and what doesn't need to be there at all.

The goal is not to create the longest handbook possible.

It's to create one that fits your business and is actually useful.

Frequently asked questions

Employee Handbooks