How to Create an Employee Handbook in 9 Steps

To create an employee handbook, gather your existing policies, identify the requirements that apply where your employees work, write and review your policies, then share the handbook with your team.

Here are the nine steps:

Assign an owner and reviewers.
Figure out where your employees are (and could be) working from.
Find your policies.
Draft your employee handbook policies.
Add state-specific and city-specific policies.
Add company-specific policies.
Get your handbook reviewed by an employment attorney.
Distribute your handbook and get employee handbook acknowledgments.
Set a reminder to revisit your handbook.

Building an employee handbook can take days or weeks, depending on the size and location of your workforce, the number of existing policies, and who reviews your draft.

Nine Steps to Creating an Employee Handbook

Before you jump into drafting policies, decide how you want to build your handbook. Depending on the method you use, you may have to do more or less of the work yourself.

Approach	How it works	Cost considerations	Best for
Employee handbook template	Start with a set of basic policies and customize from there.	Free and paid options; customization and review may cost extra.	Companies that want a starting point.
Employee handbook builder	Get suggested policies based on information about your company, then review and customize them.	Varies by provider. Handbooks.io paid plans start at $179, with a free preview available.	Companies that want recommendations specific to their business.
DIY	Write each policy from scratch.	Your time, plus any professional review costs.	Companies that want full control.
Outside help	Have HR consultants or employment attorneys create a custom handbook for you.	Request a quote based on your workforce, locations, and scope.	Companies that want expert help.

You can find out more about employee handbook builder pricing here.

Step 1: Assign an Owner and Reviewers

The steps below will be easier if you know who’s responsible for creating and launching your employee handbook. Typically, this is the founder, office manager, or HR lead. You may want to assign different people to research, write, and/or review specific policies.

Other reviewers might include:

Leadership to weigh in on company culture, benefits, and specific policies (PTO days, remote work policy, dress code, etc.).
HR to make sure policies are helpful and aligned with how the company operates.
An employment attorney to review legal requirements and check that your language (like your at-will employment clause) isn’t creating unnecessary legal risk.
Your payroll provider or PEO to make sure any mention of pay periods, payroll deductions, and benefits is accurate.

Bonus tip: Decide when you want to launch your employee handbook. Many companies use January 1 as a target date, since so many laws change on that day. However, don’t hold up legally required policies or notices waiting for your target date.

Step 2: Figure Out Where Your Employees Are (and Could Be) Working From

Many employment laws apply differently based on the number of employees and where they work. Make a list that includes:

The state(s) and city(ies) where you have employees, including employees who work remotely from home.
Total employee count, as well as employee count by state.
Different types of employees: full-time, part-time, temporary/seasonal, exempt/nonexempt, etc.
Whether any employees are part of a union or covered by a collective bargaining agreement.

Certain laws apply to employers of a certain size. For example, Title VII and the ADA generally apply to employers with 15 or more employees, while the ADEA generally applies to employers with 20 or more employees. Note that there are different ways to count employees for different laws, and it’s not always as simple as having 15 employees on a specific day. Learn more about laws that apply to small businesses from the EEOC.

Step 3: Find Your Policies

You may have some policies already in place. Look through employee offer letters, onboarding materials, and HRIS records for benefits, payroll, time off, and expense policies.

Gather together the following, if applicable:

Employment offer letters.
Employment contracts/agreements.
Benefits information, especially health insurance and retirement benefits.
Timekeeping/payroll policies.
Safety programs, like your Injury and Illness Prevention Program.
Any other policies/procedures you communicate to employees in memos, emails, etc.

Bonus tip: Talk to your managers and team members to make sure your policies actually reflect what happens day to day at your business. For example, your team might have an informal procedure for calling in when sick or requesting time off, and this is a great opportunity to document that policy and have it reviewed by legal.

Keep in mind that even if you include certain notices in your employee handbook, this may not satisfy requirements for notices that must be posted or provided to employees separately.

Step 4: Write Up Your Handbook

Every business is different, so it’s not possible to say definitively what policies you must or should include in your employee handbook. However, here are some of the policies/procedures we typically see in employee handbooks for U.S. companies, with the caveat that state laws vary widely on many of these topics:

Statement about at-will employment, where appropriate.
Disclaimer about the employee handbook.
Equal employment opportunity policy/procedures.
Anti-discrimination/harassment/retaliation policy and complaint procedures.
Reasonable accommodation policy/procedures, including accommodations for disability, pregnancy, religion, etc.
Work schedule and hours, including your workweek, pay periods, overtime, timekeeping policies/procedures, payroll deductions, etc.
Family and medical leave, including FMLA information if applicable.
Military leave and reemployment.
Lactation breaks/space.
Safety at work, including how to report injuries.
Employee handbook acknowledgment.

Here are some specifics to keep in mind:

FMLA: Private employers generally are covered if they have at least 50 employees for 20 or more workweeks during the current or preceding calendar year. Public agencies and elementary and secondary schools have different coverage rules. Employee eligibility for leave is a separate question. Learn more about FMLA employer coverage from the Department of Labor.

If an FMLA-covered employer has any eligible employees, it must also provide the general FMLA notice to each employee. If it has an employee handbook or other written guidance about benefits or leave rights, the notice must be included there. If it doesn’t have those materials, it must distribute the notice to each new employee upon hiring. Separate posting and individual notice requirements also apply. Learn more about FMLA employer notice requirements here.

Notices/posters: Depending on where your business and employees are located, you may have to include certain notices in your employee handbook, provide them separately, and/or post them. Some requirements apply regardless of business size. Check out our guide on employee handbook requirements by state.

Step 5: Consider Your State and Local Law Requirements

Some state and local laws require employers to include specific policies/procedures/notices in their employee handbooks or provide this information to employees some other way. These laws vary widely by location and may apply to businesses with even just one employee.

Here are some examples of topics covered by state/local laws:

Paid sick leave.
Paid family and medical leave.
Breaks: meal and rest.
Policies/procedures for final paychecks.
Payout of accrued PTO.
Leaves for jury duty, voting, crime victims, domestic violence situations, etc.
Harassment prevention policies/procedures/training.
Lactation accommodation.
Pay transparency/salary history.
Background checks.
Drug testing, including cannabis use.

If you operate in multiple states, you have a few options for how to handle this:

One employee handbook for all employees, with state-specific supplements.
Separate employee handbooks for employees in different states.
A general employee handbook that lays out your general policies, with state/city-specific exceptions.

Bonus tip: If you offer a certain benefit or want to provide more than is required, you can simplify some of these policies by offering your most generous policy/practice to all employees. That said, this won’t replace every location-specific requirement.

Learn more about these options in our multi-state employee handbook guide.

Step 6: Add Your Own Policies and Procedures

These are just some of the policies/procedures we see companies include in their employee handbooks:

Company mission and values.
Welcome from the owner or management.
Time off/vacation/holidays policies, including how much PTO employees get and how it accrues, if applicable.
Remote/hybrid work policies.
Dress code.
Use of company technology: cell phones, computers, AI tools, etc.
Expense reimbursement/travel.
Social media.
Contacts for questions/concerns: HR, payroll, IT, safety, etc.

Bonus tip: Use clear, plain language and write your policies in short, readable sentences. Employees are much more likely to follow policies/procedures if they understand them! You can also use section headings and provide examples where helpful.

For example, instead of saying “Employees must maintain good attendance,” you could say, “Employees should notify their supervisor prior to the beginning of their scheduled shift if they will not be coming in to work, except in emergency situations or as otherwise required/permitted by law.”

Step 7: Get Your Employee Handbook Reviewed

Before your employee handbook is final, it’s a good idea to have an attorney check it for potential legal issues. Here are a few things to keep in mind:

Be Careful About Contract Language

Be careful about words like “permanent,” “guaranteed,” and “only for cause,” since these may not reflect what you actually want to guarantee your employees and may contradict at-will employment language in offer letters/employment contracts/agreements.

Make sure any handbook disclaimer is appropriate for your state and consistent with applicable agreements.

Make Sure You’re Clear About Progressive Discipline

If you want to be able to skip steps in your progressive discipline process as needed, make sure your language reflects that, to the extent permitted by law/contracts/agreements with employees.

Be Mindful of Employee Rights

Confidentiality, social media, civility, no-recording, and other policies can run afoul of employees’ rights if they restrict employees from discussing wages/hours/working conditions or otherwise engaging in protected concerted activity, even if they’re not in a union.

See the National Labor Relations Board’s guidance on employee rights.

Make Sure Benefits Policies Line Up With Plan Documents

If your handbook discusses employee benefits, make sure the summary doesn’t contradict the actual benefits offered under the plan documents. Consider clarifying that, if there’s a conflict, the governing plan documents control.

Double-Check State/Local Requirements

Make sure your handbook includes policies/procedures required by the states/localities where you have employees and that these policies/procedures are up to date on things like sick leave, final paychecks, minimum wage, etc.

Make Sure Policies/Procedures Are Realistic

Avoid promising employees benefits you’re not going to deliver, and make sure managers/supervisors are on board with carrying out policies/procedures in the handbook!

Step 8: Distribute Your Employee Handbook and Get It Acknowledged

Once your employee handbook is complete, send it out to your employees and ask them to sign an acknowledgment form. You can share your employee handbook electronically, by PDF or link, or in hard copy.

Here are a few other tips for rolling out your employee handbook:

Don’t just send out an attachment. Let employees know there’s a new or updated employee handbook and highlight any major changes/additions. Consider hosting a quick team meeting to go over the handbook and answer questions.
Make sure managers/supervisors understand your policies/procedures so they’re applied consistently.
Keep signed acknowledgment forms on file, along with the version of the employee handbook and the date it was distributed, in employees’ personnel files.

Bonus tip: Employee handbook acknowledgments aren’t a magic solution. They can help document receipt, but they don’t establish that employees understood every policy or that your policies/procedures are lawful.

Learn more about employee handbook acknowledgment pages and rolling out your handbook.

Step 9: Update Your Employee Handbook as Needed

It’s a good idea to review your employee handbook at least once, but preferably twice, a year. Since many state/local laws take effect on January 1 or July 1, we recommend doing a review in November and May to check your policies/procedures/notices against new or upcoming requirements.

Other times it’s helpful to review your employee handbook:

You hire your first employee(s) in a new state/city.
You hit certain headcount thresholds.
You make changes to benefits, policies, or practices.
You hear about legal developments that may impact your business/employees.
Employees/managers seem confused by, or aren’t consistently following, certain policies/procedures.

When making updates, be sure to:

Keep track of different versions.
Let employees know about major changes.
Have employees sign new acknowledgment forms as needed.
Make it easy for employees to find/access the most current version.

Employee Handbook Steps: Worked Example

To tie everything together, let’s walk through the steps with a hypothetical employer:

This privately owned business has 25 employees, with 18 working in its Texas warehouse and seven being Colorado-based remote employees. Of the warehouse employees, six are nonexempt and paid hourly.

For this example, assume it’s an independent private company that has never had 50 employees and isn’t a school.

Here’s how our nine steps play out for this employer:

Step	What this company does
1. Owner	Operations manager is responsible for creating/updating the employee handbook, with input from payroll/HR and review by an employment attorney.
2. Workforce map	Considers federal, Texas, and Colorado requirements, making sure to follow employee counting requirements to determine which federal laws apply rather than just looking at total headcount.
3. What exists	Considers current offer letters, practices such as an informal PTO policy, and benefits such as a remote work equipment stipend to make sure the handbook lines up with what employees are already receiving/experiencing.
4. Core policies	Includes appropriate at-will employment language, discipline procedures, an EEO/anti-harassment policy and reporting procedures, and timekeeping/overtime policies for nonexempt employees.
5. State rules	Colorado supplement includes information on the state FAMLI program, Colorado paid sick leave, and other Colorado-specific pay requirements. Texas handbook/supplement covers Texas-specific pay requirements and other time-off benefits the company decided to offer.
6. Culture	Includes policies/procedures on remote work, returning company equipment, and reimbursement of business expenses.
7. Legal review	Attorney reviews handbook/supplements for required policies/procedures/notices, coordination of different leave policies, final paycheck requirements, and disclaimers.
8. Distribution	Sends handbook and applicable supplement(s) to employees and keeps track of who’s received them using acknowledgment forms.
9. Updates	Reviews employee handbook in May and November, and whenever laws or business practices change.

Here are a few details this company would need to consider:

Federal laws. Depending on the exact facts, including the applicable employee-counting periods, Title VII and the ADA likely would apply. Federal FMLA generally wouldn’t cover this independent private company under the assumptions above. If the company offers a group health plan, it also should determine whether COBRA applies, which generally depends on its employee count in the previous calendar year. For more information, see the Department of Labor’s COBRA guidance.
Colorado’s sick leave law. Employees generally have a right to accrue paid sick leave at the rate of one hour for every 30 hours worked, up to 48 hours per year. See Colorado’s paid sick leave guidance.
Colorado’s FAMLI program. This separate program has its own coverage rules, so just because federal FMLA doesn’t cover this company, that doesn’t mean Colorado FAMLI wouldn’t. For more information, see Colorado’s guidance on how HFWA and FAMLI interact.
Final pay when employment ends. In Colorado, when an employer discharges an employee, the employer generally must pay all earned, vested, determinable wages immediately, with some exceptions, including when the payroll unit is not operating. In Texas, an employer generally must pay final wages no later than six calendar days after an involuntary termination, although certain components of pay may follow an applicable agreement. For more information, see the official guidance on Colorado wage-payment timing and Texas final pay.

The moral of the story is that hiring even one remote employee in another state can have implications for your policies and practices beyond the state in which your headquarters are located.

Employee Handbook Creation Checklist

Once you have your employee handbook ready, be sure you’ve:

Determined who is responsible for the employee handbook, who will review it, and when you’ll roll it out.
Listed all the cities and states where you have employees and the employee counts needed to assess applicable requirements.
Collected all relevant policies and procedures you currently have in place and determined what policies/procedures you actually follow.
Created policies for core handbook topics.
Considered and created policies/procedures as required by state and local laws.
Identified any notices you need to post or give to employees, as well as any required training.
Included policies/procedures that communicate your culture and any other policies/procedures you want to include.
Considered how you’ll handle discipline and terminations.
Had the employee handbook reviewed by HR, payroll, company leadership, and employment counsel as appropriate.
Decided how you’ll give copies of the employee handbook to employees and record their acknowledgments.
Decided when you’ll next review/update the employee handbook.

Employee Handbook FAQs

How Long Does It Take to Create an Employee Handbook?

The amount of time it takes to develop an employee handbook varies based on the number of states/cities in which your company has employees, whether you currently have employee policies/procedures in writing, and the extent to which you want the handbook reviewed/customized.

Using a template or employee handbook builder software can speed up the process of drafting your handbook. Keep in mind, though, that after you create a draft employee handbook, you’ll want to spend time reviewing the handbook for accuracy, making sure it doesn’t contradict current practices, and planning how you’ll introduce it to employees and managers.

Can I Write My Own Employee Handbook?

Yes. Many small business owners develop their own employee handbook using employee handbook builder software or a template. Because employment laws vary from state to state, and even city to city, and some handbook policies/procedures can expose employers to legal risk, we recommend having employment counsel review your finished employee handbook for applicable legal requirements.

It can also be helpful to have an HR professional review your handbook to make sure it’s easy to understand and accurately describes your policies/procedures/practices.

Do I Need a Lawyer to Create an Employee Handbook?

You can draft your employee handbook without an attorney, but having it reviewed by employment counsel is a good idea, particularly if you have employees in multiple states and/or want to include policies/procedures about legally sensitive topics like employee leave or discipline.

Using employee handbook policies/procedures that were originally written or reviewed by an employment attorney can be a good starting point. Just make sure the language is appropriate for your company and the applicable federal, state, and local requirements.

What Is the First Step in Creating an Employee Handbook?

Decide who’s responsible for developing the employee handbook and make a list of all the cities/states in which you have employees, including remote employees, and your employee counts in each location.

This information will help you determine which federal, state, and local requirements your employee handbook policies/procedures need to address.

Should Employees Sign the Employee Handbook?

It’s a good idea to have employees sign an acknowledgment indicating that they received a copy of the employee handbook and know where they can go with any questions. Be sure to keep track of which version of the employee handbook employees received.

Keep in mind that an employee handbook acknowledgment form isn’t proof that an employee understood every policy/procedure and can’t take the place of employee training.

What Is the Best Software to Create Employee Handbooks?

When looking for employee handbook software, check its policy coverage for all the locations in which you have employees. Also look for customization tools, a clear update process, options for sharing the handbook with employees, and acknowledgment tracking.

Handbooks.io offers these features in our employee handbook software. Certain features are only available with an annual subscription, so compare the features in each plan to see what’s included.

How Much Does It Cost to Create an Employee Handbook?

You can download a free employee handbook template, purchase a handbook builder plan, or pay a professional to develop your employee handbook. The amount you’ll spend depends on the number of locations in which you have employees, your employee count, the extent to which you want to customize the content, and whether you want someone to review the handbook.

Paid plans on Handbooks.io start at $179 for a one-time purchase or $179/year for an annual subscription. Starter pricing covers one state and up to 10 employees. Professional review and other services may cost extra.

Create Your Employee Handbook With Handbooks.io

Ready to put your policies in writing? Handbooks.io helps you create and customize an employee handbook using human attorney-reviewed policies that reflect your business and employees’ locations.

Annual subscriptions include access to ongoing policy updates, live handbook sharing, and employee e-signatures for handbook acknowledgments.

Create your free handbook preview, or learn about our employee handbook update service if you already have a handbook.

(This article provides general information, not legal advice. Requirements depend on your business, workforce, locations, and applicable laws.)