What Should Be in Your Employee Handbook? A Small Business Guide

Why an employee handbook matters

For small businesses, clarity is everything. An employee handbook sets the foundation by clearly outlining what’s expected from staff and what they can expect in return. It’s your first line of defence against confusion, miscommunication, and even legal issues.

A well-written handbook helps:

· Define company policies and procedures

· Establish consistent workplace standards

· Demonstrate compliance with employment laws

· Onboard new hires efficiently

· Reduce the risk of disputes

It also sends a message that your business is professional, organised, and serious about its values and operations, regardless of size.

Legal must-haves in your handbook

To protect your business, your handbook must cover key legal basics. These aren’t just formalities, they help ensure you’re compliant with employment law and compliance to reduce the risk of legal action.

Include the following legal essentials:

· Equal Opportunities Policy: Outline your commitment to preventing discrimination based on race, gender, disability, religion, and other protected characteristics.

· Health & Safety Policy: State your obligations under health and safety law and what’s expected from employees.

· Disciplinary and Grievance Procedures: Explain how you handle misconduct, poor performance, and complaints, following the ACAS Code of Practice.

· Working Hours and Breaks: Define hours, overtime rules, rest periods, and flexible working rights.

· Holiday Entitlement and Leave: Clearly state holiday allowance, public holidays, and any additional leave like parental or sick leave.

· Pay and Benefits: Detail payment frequency, method, and any deductions. Include statutory and contractual benefits.

· Data Protection and Privacy: Outline how you collect, use, and store employee data in line with GDPR.

· Workers Protection Policy/Dignity at Work.

Failing to include these could expose your business to costly claims or penalties, even if you only have a handful of staff.

Core policies to include

Beyond legal requirements, your handbook should set out the everyday rules that keep your business running smoothly. These core policies give employees clear guidance on how to behave, work, and communicate.

Essential policies to include:

· Attendance and Timekeeping: Define expectations for punctuality, absence reporting, and lateness.

· IT and Internet Use: Covers acceptable use of email, devices, software, and social media essential for hybrid or remote teams.

· Dress Code: Whether it’s formal, casual, or uniform, make expectations clear.

· Remote and Flexible Working: Outline your approach and any eligibility criteria.

· Expenses and Reimbursements: Explain what can be claimed, the process, and timeframes.

· Training and Development: Describe opportunities for learning and growth, and your stance on continuous improvement.

· Performance Reviews: Include how often appraisals happen and what they involve.

These policies give your team the structure they need to focus on their work and help you stay consistent when managing staff.

Company culture and values

Your employee handbook isn’t just about rules, it’s also a chance to define who you are as a business. Setting out your mission, values, and workplace culture helps new hires understand what it means to be part of your team.

What to include:

· Mission Statement: A short, clear summary of your business purpose and goals.

· Core Values: List the principles that guide your decisions and behaviour, such as integrity, teamwork, or innovation.

· Workplace Culture: Describe the tone and atmosphere you aim to create. Is it collaborative, fast-paced, flexible, or highly structured?

· Diversity and Inclusion: Show your commitment to building a welcoming, respectful workplace for all backgrounds.

· Sustainability and Social Responsibility (if applicable): Share your stance on environmental practices or community engagement.

This section helps humanise your business and sets the tone for how employees interact, contribute, and grow within your company.

Setting expectations: Conduct, performance & discipline

Clear expectations are key to avoiding misunderstandings and ensuring fairness. Use your handbook to define acceptable conduct and what happens when standards aren’t met.

Key areas to cover:

· Code of Conduct: Set out behaviours that are expected, such as respect, professionalism, and teamwork.

· Use of Company Property: Outline rules for using tools, equipment, or vehicles

· , including personal use, maintenance, and responsibility.

· Conflict of Interest: Make clear that employees must avoid any activity that could compromise company interests.

· Disciplinary Procedures: Explain how issues like misconduct or underperformance are handled, from informal warnings to dismissal.

· Gross Misconduct Examples: List serious breaches that could lead to immediate dismissal, such as theft, violence, or harassment.

· Appeals Process: Give staff the right to challenge disciplinary decisions and explain how that works.

Being transparent about rules and consequences helps build trust and consistency, and strengthens your position if issues arise.

Practical tips for writing and updating your handbook

A great handbook is clear, up-to-date, and easy to use. It's not a legal document buried in jargon, it should be practical and accessible for every employee.

Tips to follow:

· Keep It Simple: Use plain English. Avoid legalese or complex terms that confuse rather than clarify.

· Make It Readable: Use clear headings, bullet points, and short paragraphs so people can quickly find what they need.

· Tailor It to Your Business: Don’t copy a generic template. Reflect your company’s size, industry, and culture.

· Get Legal Input: Even small businesses should have a solicitor review the handbook to ensure compliance.

· Distribute Properly: Share it with all employees, ideally as part of onboarding. Get written acknowledgement that they’ve read it.

· Review on the go! With Employment Law changing often, once per year review does not cut it: Update policies to reflect changes in the law, technology, or working practices.

A handbook that’s regularly reviewed and properly introduced adds long-term value, not just a tick-box exercise.

Common mistakes to avoid

Even well-intentioned handbooks can backfire if they’re unclear, inconsistent, or poorly maintained. Avoiding these common pitfalls can save you time, confusion, and potential legal trouble.

Watch out for:

· Outdated Content: Laws and workplace practices change; an old policy can quickly become a liability.

· Too Much Detail: Including overly specific rules can leave no room for discretion and create rigidity.

· Vague Language: Be clear and specific. Avoid phrases like “as needed” or “at management’s discretion” unless you define them.

· Inconsistency: Don’t contradict employment contracts or policies already in use. Everything should align.

· Lack of Acknowledgement: Always get employees to sign a confirmation that they’ve received and understood the handbook.

· Failure to Implement: A handbook only works if it’s enforced consistently across all levels of the business.

A well-crafted handbook reflects a well-run business, but a sloppy one can do more harm than good. It might be wise to seek advice by outsourcing HR professionals to help you with the dos and don’ts of company handbooks! At My HR Hub bespoke Company Handbooks are our speciality – no download, no cut and paste – but a clear ‘Company Culture Handbook’ with your tone of voice, illustrations, history and vision – making this a readable document and easy on the eye!

Final Thoughts

Your employee handbook is more than just a set of policies it’s a practical tool that helps define your business, protect your interests, and support your team. For small business owners, investing the time to create a clear, compliant, and well-structured handbook pays off in fewer disputes, smoother operations, and a stronger company culture.

Whether you’re creating one from scratch or updating an old version, focus on clarity, consistency, and relevance. And remember, it’s not a one-and-done document. Review it regularly to keep it aligned with your business and the law.

Get it right, and your handbook becomes not just a rulebook but a roadmap for your people.