How To Write an Employee Handbook for a Small Business: Set Expectations, Outline Rules & Boost Morale

How To Write an Employee Handbook for a Small Business: Set Expectations, Outline Rules & Boost Morale

The dreaded employee handbook. It’s one thing to figure out how to write an employee handbook for a small business, but it’s another to try and guess how to make sure your employees will actually read it.

Although it’s a task that many business owners prefer not to take on, an employee handbook is crucial when it comes time to onboard a new employee. Handbooks provide guidelines for your business environment and act as a physical FAQ for employees to reference.

We’ve outlined what you should include in your handbook as a small business owner, along with some tips on making it read more like a magazine than a manual.

Do I Really Need a Handbook?

It’s common for a store owner to think that the principles and practices they have in place at work don’t need to be written down. But before you dismiss the handbook for your business, answer the questions below:

1. Do you have more than one employee?
2. Do contractors or part-time workers often cycle through your business?
3. Do you have employees in managerial roles?
4. Are there recurring questions that employees consistently ask?
5. Is calling out sick or taking vacation days a common practice?
6. Do you find yourself reminding people about policies in person?

If you answered yes to any of the questions above, you really need to figure out how to write an employee handbook for your small business.

Okay, Fine! But Will Anyone Actually Read It?

All new employees will thumb through the manual on their first day of work before they work up the nerve to refill their coffee. But creating a handbook that gets people excited about work and informed about the culture in the office is what your true aim should be.

A manual needs to be informative, but that doesn’t mean you can’t have some fun with it.  Here’s a few great examples to set your creative gears in motion.

The Motley Fool

A 45-page manual that’s chock full of entertainment and team building exercises, like having new employees create their own core value.


The Zappos Culture Book is a whopping 297 pages and no, you don’t need a handbook this big. It’s largely written by their own employees with stories about what the company culture means to them. This guide reads more like a yearbook than a strict policy outline.

Valve Software

Visually stunning and fun to read, this handbook covers everything from how to adjust your standup desk to an outline of growth potential and an explanation of peer reviews.

Meet Edgar

This is a great outline to steal. The handbook takes employees from their first day on the job to outlining office perks and benefits and finally, to the nitty gritty stuff like security policies and code of conduct.

A manual needs to be informative, but that doesn’t mean you can’t have some fun with it.

As a small business owner, you can make these as basic or as demiurgic as you want. There’s no hard and fast rules about how a handbook should be made, as evidenced above. If you’re still overwhelmed on what should be included in an employee handbook, we’ve got an outline you can follow below.

Mission Statement

Consider this your company pitch. What makes your business awesome? What is your personal philosophy behind it? How do you want people to feel at work? These are the questions you want to answer in your company employee handbook.

This section should set the tone for the corporate culture. It doesn’t need to be pages long——a simple paragraph will do.

Here’s an example from Warby Parker:

Warby Parker was founded with a rebellious spirit and a lofty objective: to offer designer eyewear at a revolutionary price, while leading the way for socially conscious businesses.

Here’s a simple example from Carbonite:

At Carbonite, our values are part of our DNA. They guide the way we work with our partners, customers and each other. By embracing power, simplicity, security and value, we create a productive, fun and rewarding place to work.

If the muse still hasn’t struck, check out your favorite eCommerce sites and read through their mission statement and careers pages before tackling your own.

Attendance & Breaks

It might be obvious to you that employees shouldn’t take more than 45 minutes for lunch, but you can’t assume a new hire will know that. Every culture is different and if you have guidelines on lunch breaks and days off, these should be outlined.

Maybe punctuality is less important in the office, but you have strict guidelines on sick days. Or perhaps employees have unlimited sick days. Regardless of what you do offer, set expectations and make the disciplinary actions evident should the rules be broken.

Here’s an example attendance policy from the American Chamber of Commerce:

You are hired to perform an important function at ABC Company. As with any group effort, it takes cooperation and commitment from everyone to operate effectively. Therefore, your attendance and punctuality are very important. Absences cause a slow-down in the work and added burdens for your fellow employees. Good attendance is something that is expected from all employees. You should be at your work station by the start of each workday at the time designated by the department. Excessive absenteeism or tardiness will not be tolerated and will be cause for disciplinary action up to and including discharge.

You can read the full attendance policy right here.

Pay Period

Employees really like to know when they’re going to be paid. If you cut checks twice per month or weekly, outline it in the handbook.

If you have any online software where they can access pay stubs or a system that lets them set up how they are paid, be sure to include that as well.


This is especially important if you have both salary and hourly employees. Under the Fair Labor Standards Act, salaried workers who earn less than $47,476 will are now eligible for overtime pay, whereas this had previously been a practice only used for hourly employees.

Be sure to outline your employee’s rights in this section. You can find full overtime policies available to use through the Society for Human Resource Management right here.


Every workplace offers different paid holidays. The most common paid holidays are the following:

New Year’s Day
Memorial Day
Independence Day (4th of July)
Labor Day
Thanksgiving Day
Christmas Day

If you also offer holidays like Martin Luther King Day or Christmas Eve off, be sure to make note of those here. And if you have special exceptions for religious holidays, it’s important to outline that policy as well.

If you’re nervous about an office that’s completely empty on Black Friday, use this section to outline any outliers that need to be requested off in advance. Unless you’re okay with being the only one in the office when Cyber Monday rolls around, in which case, bravo!

Harassment Policies

One thing all employers can agree on is that workplace harassment of any kind won’t be tolerated. But if employee issues do arise, being clear about policies and how it will be handled is crucial.

Define what harassment is in your handbook. You can even offer examples so that your policy is crystal clear. Here are some examples to include from Workable.

Sabotaging someone’s work on purpose.
Engaging in frequent or unwanted advances of any nature.
Commenting derogatorily on a person’s ethnic heritage or religious beliefs.
Starting or spreading rumors about a person’s personal life.
Ridiculing someone in front of others or singling them out to perform tasks unrelated to their job (e.g. bringing coffee) against their will.
Sexual harassment is illegal and we will seriously investigate relevant reports. If an employee is found guilty of sexual harassment, they will be terminated.

You don’t need to get too detailed in terms of what constitutes harassment but employees should read it and know how to conduct themselves for full transparency.

Define what harassment is in your handbook. You can even offer examples so that your policy is crystal clear.

Use approved language from the U.S. Department of State on sexual harassment and discriminatory policies from their Office of Civil Rights if you find yourself wanting to be crystal clear in what is acceptable.

Vacation and Paid-Time Off

Now this is a chapter most employees will gladly refer to when the time comes.

The question most employers will get asked is: what’s the difference?

Vacation days are meant to be used just for that – vacation. Whether you offer two weeks, unlimited days or have an accrual system, the policy for what employees receive should be noted separate than what you offer as sick days.

Some companies group all paid days off – holidays, sick, vacation – into a bank of paid time off or PTO. The value of paid time off is that it’s flexible. Employees can use it however they choose.

According to a 2016 survey from the Society for Human Resource Management, 87% of organizations under them offer PTO plans and 91% offer paid vacation plans to employees based on their length of service at their business.

Ultimately, the decision is up to you in terms of what’s offered, but be sure to outline what constitutes paid time off either way you go.

Incentives & Perks

Now it’s time to have a little fun. You don’t need to look up any legal jargon or worry about federal laws for this section of the handbook. All that’s required is a focus on the benefits you offer your employees.

Here are some things you can mention in this section of your handbook:
– Free lunches on Fridays
– Weekly happy hours
– Extra vacation days with positive performance reviews
– Employee discount
– Education stipends
– Biannual team outings

Consider this the section of your handbook that will drive excitement when your employee sees it. When you onboard a new hire and they flip through this book, you want them to get to this page and be stoked to have gotten such a sweet eCommerce gig.

Here’s a page from Atlanta-based 22Squared’s notebook where they promote their Friday Beverage Bar.

Did you get excited reading that? Because I did. Take a few cues from their concept and make a simple tradition something to get pumped about.


Safety procedures are crucial if you have a team of warehouse employees that are handling inventory, operating machinery and in charge of picking and packing.

You want to make sure employees are excited about their work, but mindful too.

Depending on how large your warehouse operation is, you might consider another manual devoted entirely to procedures within the warehouse. The Occupational Safety and Health Administration has a short guide that you can use as a point of reference for outlining warehouse education.

Signature Page

Include a final page that asks employees to sign on the dotted line. It’s a solid confirmation that they made it to the last page and actually read the manual. Your hard work will have paid off tenfold!

You can ask for this page to keep on file should any clear workplace violations come up. Or simply have them sign it for their own personal confirmation that they’re aware of the workplace rules.


There’s no right or wrong version of an employee handbook design.

Some employers like to hand out a hard copy while others prefer to be completely digital and have it accessible on the interwebs or on Dropbox. And some handbooks, like Facebook’s, are just plain gorgeous.

Photo via Ben Barry

Determine the format of your handbook based on what makes most sense in your company culture. But we will say this: it’d be weird if your online business didn’t have some kind of digital version available.

Now that you’re armed with your template, you know exactly how to write an employee handbook for a small business. If you’ve got one you want to show off, link to it in the comments below!

Ready to find your next great hire and future reader of your handbook? Post a job right here to find top talent in the eCommerce space.

Andrew Youderian
Post by Andrew Youderian
Andrew is the founder of eCommerceFuel and has been building eCommerce businesses ever since gleefully leaving the corporate world in 2008.  Join him and 1,000+ vetted 7- and 8-figure store owners inside the eCommerceFuel Community.

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