Comprehensive and easily understandable HR policies are essential for your company to run smoothly. By acting as a clear outline and foundational definition of what is expected from employees and leaders in the company, your policies help to keep your workforce safe and focused on their priorities.
This guide outlines the key policies every organization, small and large, should have in place, additional HR policies to consider, as well as best practices for writing and implementing policies that are valuable.
What is an HR Policy?
An HR policy is a document or handbook that gives guidance on an employment issue and how the organization approaches it. Its intent is to describe the official stance of the organization on any matter covered by the policy. By acting as the ultimate truth of what is acceptable and unacceptable conduct, HR policies protect your company legally and educate employees on expectations.
Good human resources policies will inform employees of how they can expect to be treated and how they should interact with the company and each other. Having core HR policies in place will save the company, you as their HR professional, and the employees much frustration and headaches.
The 6 Essential HR Policies Your Company Absolutely Must Have in Place
There are many different HR policies that cover your business in terms of compliance and employee safety. Below are the absolute must-haves we recommend putting in place and reviewing regularly. Depending on your industry and the type of work your company does, the specific policies that are critical to your business will differ and more may likely be needed.
However, no matter if your company provides services, manufactures products, consults, entertains, sells, or invests— all companies need to have the following HR policies:
1. Work Hours and Attendance Policy
Your employees need to know expectations of when they should be working.
- How much grace is there for being late?
- What days off do they get? Are these paid or unpaid?
- Is their schedule set or changing?
- How do they let someone know when they intend to take a leave of absence?
- What is the protocol for calling in sick?
- Are there points for missing work and/or being late?
Those are all questions your employees will have and answers you will need to provide them. A leave policy stipulates what an employee must do to compliantly book time off in advance, or notify the company if they have an emergency.
2. Benefits and Compensation Policy
This is a very important policy and one that prospective employees will ask about prior to accepting a job offer.
Offering a desirable employee benefits package can set your company apart from others while demonstrating your commitment to your employees.
This policy should include what employee benefits are offered such as health insurance, retirement benefits, employee assistance plans, and discounts. Your benefits policy should also include a holiday schedule and holiday pay information.
Any leaves offered by the company (such as medical, personal, military, parental, jury duty, bereavement, etc) should be listed here. In addition, the policy should be clear on what is and what is not Paid Time Off (PTO) plus information regarding accrual, usage, caps, and any other associated rules.
For example, if the company offers paid time off, the time of eligibility to take it must be specified — whether the employee may take PTO during their first month or year of employment.
Be sure to specify what parental leave employees are entitled to. For example, whether this is paid or unpaid, whether it is limited to maternity leave, or also includes paternity leave, and whether paid general leave can be added to lengthen the time parents have before returning to work. Once a new parent returns to the office, they will also need guidance as to time and spaces set out for lactation, and/or any childcare benefits the company may offer.
In addition to this, your compensation policy should cover:
- Overtime pay
- Benefits for various employment classifications. I.e. contract, part-time, and full-time employees
- Procedures for adding a new hire to the payroll system, and
- Protocol for claiming reimbursement on out-of-pocket company expenses
As policies around compensation can be complex, it is advisable to look into payroll and benefits software. These tools offer templates and workflows that ensure a high level of compliance without too much input from your HR team.
Include classifications for full-time and part-time employment so that there are clear parameters for the benefits and perks employees are entitled to.
3. Employee and Employer Responsibility for Safety Policy
Your employee safety policy must emphasize the company’s commitment to the safety of its workers.
Clearly state the company’s responsibilities towards safety as well as the company’s expectations for the employees to practice safety precautions in their daily duties.
It is advisable to make safety awareness a shared responsibility between the company and the employees. Include a section on how employees should report safety concerns or accidents. This section can include a summary of the company’s Emergency Action Plan and related procedures.
Outline the required personal protective equipment (PPE), as well as the standards PPE items must adhere to. Be specific about whether the employee or the company provides the PPE and, if a PPE item is lost due to negligence, who is responsible for replacing it. If the company does provide PPE, provide instructions on how to request or obtain the PPE.
4. Employee Code of Conduct
Appropriate and expected employee conduct is a very important section of the employee handbook.
Your workplace policy around conduct is where you will lay out human rights expectations for employees and the company. Explain what is and isn’t allowed in the work environment, such as your stance on presentation, language use, tolerance, and use of social media.
You’ll also use this policy to describe behaviors the company deems unacceptable, such as workplace violence, sexual harassment, carrying weapons, substance usage, and abuse. Your code of conduct is also where you would outline anti-harassment and non-discrimination policies.
Include information on how employees should report violations of the conduct policy including who to report to when their manager is involved.
Within the employee conduct policy, you’ll need non-discrimination and anti-harassment policies. Be sure to review local, state, and federal laws when drawing these up as the regulations may change depending on location. Some anti-harassment policies are required by state law depending on your company’s location and these need to be included. Write clear descriptions of what constitutes harassment and discrimination into your policies.
It would also be good to include an anti-retaliation policy to help alleviate employees’ worries about reporting.
To promote transparency, outline the disciplinary actions for various infringements of these policies. Specifying the consequences a perpetrator must face means human resource management and other leadership teams are held accountable for consistency in the measures taken to deal with infringements.
5. Compensation and Performance Policy
Your Compensation and Performance Policy is where you can explain your performance management system and how often employees can expect performance reviews.
If your company requires managers to meet with employees on a regular basis, it should be included here. In addition, your compensation policy should cover:
- Opportunities for career growth offered by the company, and how employees can qualify.
- How often and when salary raises can be expected.
- Information regarding bonus amounts, as well as the frequency and when to expect bonuses, commissions, or other forms of applicable performance-based remuneration.
Employees need to know what to expect regarding compensation and how their performance is measured in order to better be prepared when performance reviews and raises come around. The better your employees understand these issues, the less friction there will be during review cycles.
In order to run a comprehensive performance management system that is templatized and easily adheres to your policy, you might want to look into performance management software.
6. Disciplinary and Termination Policy
At some point, you will have an employee who violates policies or does not perform up to expectations. When that happens, you will need to take action to remedy the situation.
Having a clear policy on what steps are taken in discipline and what each discipline action means is essential not just for managers and employees to be on the same page, but for legal protection as well. This is especially important when it comes to termination. Although U.S. employers fall under the at-will employment law, it is important to prove "just cause" for termination and the conditions of employment a worker must uphold.
Clear boundaries in your termination policy make it easier to let bad employees go by pointing to an exact behavior or discretion that can stand as “just cause”. Having a well-crafted employment policy outlining disciplinary steps and grounds for termination prevents discrimination charges and can make any legal actions that result more likely to go in your company’s favor.
This policy can also outline the legal requirement for an employee to be retained by the company. For example, it can put the onus of attaining work permits and required certification on the employee, which indemnifies the company from keeping them on the payroll if they don’t.
The termination policy should also outline voluntary termination. Specify how employees are expected to resign and leave the company when they are ready to exit. Include an example of a 30-day resignation letter, information on how to hand in their resignation, the desired notice time, and exit interview policies.
What Happens in the Absence of Clear HR Policies?
If these HR policies aren't in place, your organization is at risk of confusion, inconsistency, favoritism, and non-compliance. This will quickly erode the work culture and likely lead to higher turnover. Worse, it could lead to fines if the organization is in violation of labor laws. Not to mention opening the organization up to potential lawsuits for harassment, disparate treatment or a host of other possibilities.
Having these six essential policies, and any others that apply to your company, in place and ensuring compliance will not only protect your company, but it will help your employees know what is expected and what to do in most situations. This will help make your job easier as employees and managers should be able to look up answers they need.
Deciding What HR Policies Your Company Needs
As I said above, there are many more policies that companies may want to incorporate into their new employee onboarding and ongoing operations manual. All companies should include at least the policies we’ve covered here as part of their overall HR policies. These are the essential topics that the company needs to communicate to its employees as well as what employees need to know to avoid any misunderstandings and what to expect.
Once you have these HR policies developed, it will give you a feel for what else you may want (or not want) to have as additional resources.
Bear in mind that your HR policies give new employees a feel for the culture. If your policies are expressing the culture you want to convey and making employees feel safe and informed, you’re doing a good job. If not, now is a good time to change some things before creating the rest of your policies.
More HR Policies You May Develop
Remote Work or Hybrid Work Policy
- These are only necessary if you have a remote or hybrid work model.
- The policy must outline any employee surveillance tools and performance management processes that monitor productivity.
- A hybrid policy should cover how many hours an employee is expected to be in office, as well as events, meetings, and other times their physical presence is mandatory.
- A fully remote policy should outline the hours an employee is expected to be online or on call.
- This policy also stipulates what an employee should do if they are sick or otherwise unavailable on a day they would normally be working from home.
- If employees use their personal devices for work reasons, draft policies for privacy and security measures that apply to company data access.
Recruitment and Hiring Policy
- The policy outlines the conditions under which a new position can be created.
- It clearly describes the company’s hiring process including candidate criteria, the interview process, and parameters regarding salary negotiations and pay transparency.
- The policy can include standardized templates for the company job listing, offer letters, and employment contracts.
- The hiring policy must also cover the legal steps of new employee onboarding such as drawing up a W-4.
- If you have an employee referral policy, include it in your employee handbook. This must explain how any referral rewards are paid out, and under what conditions a reward would apply.
Reasonable Accommodation Policy
- This policy outlines the company's commitment to supporting employees who require accommodations. For example, employees with disabilities or sincerely held religious beliefs.
- State and federal laws may mandate a company to have this in place if employees request it, so be sure to understand what’s legally required.
- This policy defines the roles and responsibilities of employees, HR, and management in implementing and maintaining the policy and accommodations that it describes.
- It should also outline the process employees must follow to request an accommodation.
- Even if employees don’t submit a request for an accommodation in writing, be sure to document each request and any action taken to make their workplace more accommodating.
Workplace Attire Policy (Dress Code)
- This policy must clearly define appropriate and inappropriate workplace attire and personal appearance.
- If employees are required to wear a uniform, the acceptable condition and care instructions for maintaining the uniform must be included.
- Include information about different environments in your workplace. For instance, if safety gear must be worn in various areas to adhere to the employee safety policy.
Company Property Policy
- Include documentation and procedures for accessing, using, and transporting company property such as machinery, tools, and computers.
- A guidebook for remote or hybrid employees who use company hardware and software at home should clearly stipulate who has access to use these things, the treatment of company data, and when the onus of replacing broken property falls on the company vs the employee.
- Incorporate the process, condition, and expectations of how equipment should be returned if the employee is done with it, or when they leave the company, as well as consequences if items are either damaged or not returned.
Social Media Policy
- A social media policy describes what conduct an employee is expected to maintain online as a representative of the company. If may, for example, specify that employees will be terminated if their social media displays discriminatory or illegal content.
Workplace Confidentiality Policy
- A confidentiality policy is necessary when an employee has access to sensitive employee, company, or customer data.
- The policy must outline reasonable efforts the employee must make to ensure data protection and prevent data breaches, as well as disciplinary actions if the employee is found to be negligent of these efforts.
- Be aware that, depending on the state’s pay transparency laws, employees may not be required to keep details regarding remuneration confidential.
Best Practices for Maintaining HR Policies
Check What Laws Apply to Your Company
No matter what you do or do not include in your HR policies, be sure to run them by your legal department to ensure they comply with local, state, and federal regulations.
Compliance with Federal and State Laws
- An Employment Information Report (EEO–1), also known as a Standard Form 100, must be filled out annually with the EEO-1 Joint Reporting Committee for companies with at least 100 employees. This report covers a demographic breakdown of the company’s employees by race and gender.
- Family Medical Leave Act (FMLA), and employer-shared responsibility as it pertains to the Affordable Care Act (ACA).
- Many U.S. states recently revised or are in the process of revising their pay transparency laws. This affects how job postings, salary disclosure, and employee data access policies should be written or updated.
Compliance with City and County Laws
- Be sure to maintain compliance with the company’s local and state regulations. For example, check on laws regarding minimum wage, anti-bias rules, and over time that you should bear in mind while writing your HR policies.
Get Confirmation of Receipt
When distributing a new HR Policy, get a signed acknowledgment of receipt and understanding from each employee.
Ensure employees sign any updates to your HR policies.
Ensure Policy Accessibility
Employees must always have access to the HR policies as they do no good if they can’t be readily available for review. Make sure policies are accessible and that employees know where to find them on your (Human Resources Information System) HRIS or your company database.
Include an FAQ section
For the sake of transparency, and to save your HR team from answering the same questions regarding HR policies multiple times, include a frequently asked question (FAQ) section in HR policies that you can update with common queries.
You can also invest in an HR Chatbot to respond to regular queries workers need to be answered by the HR team. The chatbot can be pre-trained on common issues workers bring to HR and respond with helpful information in real-time.
Enforce Your Policies
Be sure that your HR policies are adhered to. They can’t protect your company if they are not enforced. In fact, they can be used against the company if they are not followed. Not to mention protecting your company from charges of disparate treatment. Ensure everyone reviews the policies annually to ensure compliance.
Update the Policies
Review your current HR policies annually and make any changes needed. Be sure to check for new legislation and include any changes in related law. Some laws may require an immediate update in your HR policies. Always be sure to run any changes to your HR policies by your legal team to ensure accuracy and compliance.
Whether making an immediate change or an annual change, you must acknowledge the update and make every employee aware of it. In addition to the update, the employees should also be encouraged to review any unchanged HR policies as well. This will help ensure their understanding of the policies and compliance with them.
Having comprehensive and clear HR policies in place means you should have minimal workplace issues and disruptions within your human resources department as everyone (including employees, managers, leaders, and HR) should understand what is expected of them.