What is an employee handbook?

An employee handbook is a written document that outlines the policies, procedures, and expectations for employees within your business. It serves as both a guide and a contract of understanding between you (the employer) and your team, ensuring everyone is on the same page when it comes to how things work in your workplace.

For small business owners, having a clear and well-organized employee handbook isn’t just helpful—it’s essential. It protects your business legally, sets the tone for your culture, and gives your team a consistent point of reference for everything from dress code to scheduling policies. With Homebase, you can streamline your onboarding process and make your handbook part of a smooth, digital welcome for new hires.

Why small businesses need an employee handbook

Even if you only have a handful of employees, an employee handbook provides structure and clarity. Without one, you risk confusion, inconsistent rule enforcement, or even legal trouble.

An effective handbook helps:

• Establish consistent workplace rules
• Protect your business from liability
• Provide clear expectations for employees
• Support onboarding and training
• Reinforce your company culture
• Ensure compliance with labor laws

It’s a proactive tool that builds transparency and professionalism in even the smallest of teams.

What to include in an employee handbook

Every handbook should be tailored to the unique needs of your business, but there are a few core sections all small business handbooks should cover:

1. Welcome message and mission statement

Briefly introduce your business, your values, and what you expect from your team. Set the tone for your culture and customer service philosophy.

2. Employment basics

Explain the type of employment (at-will or contract), equal opportunity policies, and any relevant job classification info (full-time, part-time, exempt, non-exempt).

3. Compensation and work hours

Include policies on:

• Pay schedule and payroll process
• Time tracking procedures
• Overtime policies
• Breaks and meal periods

4. Scheduling and attendance

Explain how scheduling is handled, how to request time off, your expectations for attendance, and the consequences of no-shows or tardiness.

5. Code of conduct

Set clear expectations around:

• Professional behavior
• Dress code
• Use of phones or devices at work
• Customer service standards
• Harassment and anti-discrimination policies

6. Health and safety

Cover any workplace safety rules, how to report incidents, and emergency procedures—especially if you work in industries like food service, construction, or retail.

7. Leave policies

Outline the types of leave available:

• Paid time off (PTO)
• Sick leave
• Family or medical leave (FMLA if applicable)
• Jury duty or bereavement leave

8. Employee benefits

Explain what benefits are offered, such as:

• Health or dental insurance
• Employee discounts
• Retirement plans
• Wellness programs

9. Technology and confidentiality

Include policies around using company devices, internet access, data protection, and handling confidential information.

10. Disciplinary process and termination

Be transparent about how you handle policy violations, misconduct, or performance issues. Outline your process for verbal warnings, written warnings, suspension, and termination.

11. Acknowledgment form

Include a form at the end for employees to sign, confirming they’ve received, read, and understood the handbook.

How often should you update your employee handbook?

Your handbook isn’t a “set it and forget it” document. As your business grows or employment laws change, your policies may need to evolve. A good rule of thumb is to review your handbook at least once a year and update it when:

• You expand to a new location or state
• Local, state, or federal employment laws change
• You introduce new scheduling, payroll, or leave policies
• Your company culture or goals shift

Make sure any updates are shared with your team and that you collect updated acknowledgments.

Common mistakes to avoid

While employee handbooks can be powerful, they need to be done right. Watch out for these pitfalls:

• Being too vague – If your policies are unclear, they won’t be effective.
• Copying a template word-for-word – A generic handbook may not reflect your real policies. Customize it to your business.
• Failing to distribute or update it – A handbook no one reads (or sees) won’t help your team.
• Not following your own policies – Consistency matters. If you ignore your own rules, employees will too.

How Homebase simplifies onboarding and policy sharing

Homebase helps small business owners simplify hiring, onboarding, and team management—making it easy to integrate your employee handbook into your workflows.

With Homebase, you can:

• Digitally onboard employees with required documents and policies
• Upload and share your employee handbook securely
• Track who has reviewed and acknowledged it
• Automate scheduling and time tracking policies that align with your handbook
• Stay compliant with labor laws by updating team policies in real time

Explore Homebase Hiring and Onboarding to build a strong foundation for your team—starting with a clear, consistent, and easy-to-access employee handbook.