Small Business

Why Develop an Employee Handbook

LegalShield Editorial Team
March 26, 2021
•
4 min read
Woman working from home on Employee Handbook
Get the legal advice you need without the hourly legal fees
Explore Plans

Building out your business requires a lot of hard work and just as much paperwork, and given those demands, there’s undoubtedly temptation to cut administrative corners ever so slightly in areas that seem less urgent or impactful. Take the employee handbook: at first blush, it might seem like a document that would be nice to have, whether online or in paper form, but hardly critical to the work at hand.

Important documents for employees

This view misunderstands what an employee handbook provides, as it can be one of the most important documents for imparting both knowledge and values to employees old and new. Here are just a few reasons why developing an employee handbook is a vital step for any business.

‍Setting expectations. One of the biggest/employmentst tasks involved with onboarding new hires is imparting all the information they need to know in a brief period of time. With an employee handbook, you can put on paper both the company mission, values and culture plus the expectations for basics such as office hours, work-from-home, and the responsibilities that come with the position they’ve accepted. You can’t very well hold people to a standard that was never clearly established, and it’s better yet to have that standard in writing to avoid claims of confusion or misunderstanding.

‍Communicating culture. Doubtless your company has its own values that you want your team to embrace and embody, but you can’t assume that every employee innately understands exactly the culture, or that new hires will grasp it simply through osmosis. By spelling out what you want your team to strive towards, you ensure that everyone is on the same page and (hopefully) working within the culture towards the company’s goals.‍

Demonstrating benefits. While benefits may have been touched on during the interview process and listed at a high level in an employment contract or letter, it’s unlikely that those in charge of hiring were able to get into the full details, or that newly-hired employees were able to absorb it all during that stressful and hectic time. In laying out the full range of benefits you offer, you’re both educating new employees and reminding current ones of the perks that come with employment at your company.‍

Establishing consistent standards. Nothing can undermine morale like the notion or belief that some people at the company are getting preferential treatment or are exempted from the application of policy or rules. Creating a standard for conduct and behavior, as well as for the consistent application of any workplace policy, and enforcing those standards evenly and equally in every instance helps ensure that employees believe they will be treated fairly in the workplace.‍

Creating a written record of policies for future reference. Unfortunately, it may be the case that an employee feels that they were treated unfairly by you or your company, and seeks or threatens to seek legal action for that treatment. In that case, you’ll be glad for a written guide of rules and standards that you can refer to and provide to a lawyer. This is why it’s important to have a thorough guide covering any contingency or possibility, and why you should have employees sign an acknowledgment that they have read and understood the policies outlined and are agreeing to comply with them.

‍Ensuring compliance with state and federal employment laws. Apart from your own internal policies, there are legal obligations placed upon your company by both state and federal laws (and sometimes county or city ordinances) that need to be communicated to your employees. For things like health and safety, FMLA leave, Workers’ Compensation, discrimination or harassment, it’s important not only that workers know what legal rights they have, but also that you and the company understand fully and are firmly committed to abide by these laws.

‍Imparting procedure for handling problems and complaints. Despite your best efforts, there may still be occasions when an employee has an issue or complaint or even just a question that can’t be answered. For those instances, you will want your handbook to lay out the formal conflict or dispute resolution process whereby your employees can address their concerns without feeling like they have to look outside of the company for help. Also, this process will help supervisors manage the inevitable conflicts in the workplace. Ultimately, you want employees to feel they can trust management, and that their issues will be heard and taken seriously.

When you start to include every point that needs to be put in writing into an employee handbook, it can be a complex document, and one that can have legal implications when it comes to laws at both the state and federal level plus local ordinances.

Talking with a LegalShield expert provider lawyer to help sort through employment law is a smart step when crafting your handbook. Sign up today to get started.

Get the Answers You Need,
When You Need Them

Shop Plans
LegalShield Editorial Team
Author
LegalShield Editorial Team

Written and maintained by the LegalShield content team, covering legal and identity protection topics for individuals, families, and small businesses.

Share this article
​
Label
​
Label
​
Label
​
Label

Related articles

​
Back to Learning Center
Two women discussing documents during a business meeting
Small Business
13 min read
How to Dissolve an LLC: 4 Considerations to End Your Business

Dissolving an LLC can be tricky, and doing it without guidance can lead to unnecessary stress and delays. We’ve put together some helpful information so you can start the LLC dissolution process with more peace of mind.

•
13 min read
Person avatar icon.
Author Name
,
Author Title
September 28, 2026
Two people sitting at a table in a bright office environment.
Small Business
15 min read
Common Components of Employment Contracts in the US

An employment contract is an important piece of paperwork because it defines the working relationship, your expectations, and conditions. Here are some of the common components included.

•
15 min read
Person avatar icon.
Author Name
,
Author Title
September 25, 2026
Business owner reviewing logo design before filing a trademark application
Small Business
12 min read
How to Trademark a Logo for Your Business

By the end of this blog, you’ll get a high-level summary of trademarking a name and logo, how logos differ from business names and artwork, and how much it all costs.

•
12 min read
Person avatar icon.
Author Name
,
Author Title
September 23, 2026
 Small business owner standing next to an open sign.
Small Business
6 min read
What DBAs Are and Why Businesses Use Them

A DBA is a name registration that lets you run your business under a name other than your personal legal name or legal business entity. While a DBA offers branding flexibility and market expansion opportunities without creating a new legal structure, it does not provide legal liability protection, tax benefits, or function as a business license.

‍

•
6 min read
Person avatar icon.
Author Name
,
Author Title
September 21, 2026
Two people standing in a newly-built house, planning the interior.
Small Business
6 min read
How to Manage Potential Risk With an Indemnity Agreement

An indemnity agreement settles the “who is responsible” question ahead of time. One party promises, in writing, to cover certain losses tied to the work, so the other isn't left with the bill. These promises appear in construction contracts, leases, and business sales.

‍

•
6 min read
Person avatar icon.
Author Name
,
Author Title
August 13, 2026
Two business owners scan packages and work on a laptop while smiling at each other
Small Business
4 min read
What Is a Certificate of Good Standing? A Guide for Small Business Owners

A certificate of good standing is official proof from your state that your business is registered and current on its requirements. Most lenders and agencies want a recent one, so it helps to know how to get it before someone asks.

•
4 min read
Person avatar icon.
Author Name
,
Author Title
August 10, 2026
A business owner who successfully transferred their LLC to another, new owner.
Small Business
11 min read
How to Transfer an LLC to Another Person

Whether the goal is selling a company, bringing in a business partner, or passing it to a family member, the LLC ownership transfer often involves reviewing the LLC's operating agreement and the applicable state's rules.

•
11 min read
Person avatar icon.
Author Name
,
Author Title
August 4, 2026
*See your plan contract for details. Additional fees, limitations, and waiting periods may apply.