Personnel Policies FAQ

Your business may be too small for a full-time human resources (HR) department, but you still need someone to handle HR functions and develop employee policies. Thanks to HR software and online resources, even small businesses can build robust personnel policies that support the business and keep employees safe and satisfied.

In this article, we’ll cover frequently asked questions about small business personnel policies. For more information, visit FindLaw’s Employment Law and Human Resources​ section or contact a qualified employment law attorney.

FAQ for Personnel Policies

Having established personnel policies can reduce confusion and protect you if issues arise. Below are some frequently asked questions and answers about HR policies for small businesses.

What Are Personnel Policies?

Personnel policies are the rules and regulations your workers must follow while on the job. Personnel policies, or company policies, explain workplace requirements in detail. They can cover time off, sick leave, and vacation time. Your policy should describe how many absences you permit before the employee faces disciplinary action.

Personnel policies should also address:

• Job descriptions and details of job duties
• Dress codes
• Health and safety policies
• Human resources reporting policies

Your personnel policies cover anything that affects your company culture and employee interactions.

What Are Some Essential Policies for a Small Business?

While every business is unique, a strong set of personnel policies generally includes:

• Equal Employment Opportunity (EEO) Policy: A statement of your commitment to following anti-discrimination laws
• Anti-Harassment Policy: Clear rules prohibiting harassment (including sexual harassment) and a procedure for reporting
• Code of Conduct: General expectations for workplace behavior, professionalism, and ethics
• Compensation and Payroll: Details on pay schedules, overtime, and timekeeping procedures
• Leave Policies: Guidelines for vacation, sick leave, and any other types of paid or unpaid time off
• Health and Safety Policy: Your commitment to providing a safe workplace, including procedures for reporting accidents or injuries
• Disciplinary Action Policy: A clear, progressive process for addressing employee misconduct

Clear policies protect you from an employee claiming they didn’t know they were breaking company rules.

Are Personnel Policies the Same as Employment Contracts?

An employment contract​ defines the relationship between small-business owners and employees. The contract specifies employees’ pay rates, benefits, and other factors. Personnel policies are general and apply to everyone who works with the company.

What Is At-Will Employment?

At-will employment​ is often misunderstood. It’s common to believe it means that an employer can terminate an employee for any reason. It’s true as long as the firing is for a legal reason. At-will employment doesn’t protect a business owner if they fire someone for an illegal reason.

Even in at-will states, you can’t legally fire a worker for any of the following reasons:

• For discriminatory reasons based on race, color, religion, sex, national origin, or disability, when federal, state, or local antidiscrimination law covers the employer and employee, such as pregnancy and FMLA-based leave.
• For filing an EEOC or OSHA claim, the so-called whistleblower protection
• If an implied contract exists between the parties, regardless of whether it’s written or oral
• Violations of a state’s public policy wrongful termination law

An at-will employment termination must still conform to all applicable laws. Some states, such as California, specifically prohibit employers from terminating employees for exercising a statutory right or refusing to break the law. If an employer tells a worker they’ll be fired unless they commit an unlawful act, the worker can refuse. A wrongfully terminated worker can sue for lost wages and benefits.

What Laws Affect Personnel Policies?

Your company policies must follow federal, state, and local employment laws. Employers must comply with federal laws on sexual harassment, disability accommodation, and occupational safety, as well as state-specific laws for issues like workers’ compensation. State and local laws may mirror federal laws or provide even more protections and restrictions.

Your workplace policy should include whatever is specific to your business and its legal requirements. Many laws, like the FMLA and anti-discrimination statutes, apply only after your business reaches a certain number of employees. An employment law attorney can help you determine which laws apply now and which you should prepare for as you grow.

How Often Should I Update My Personnel Policies?

Most federal and state employment laws don’t change much from year to year. Consider updating your personnel policies when:

• Your employee benefits are altered by changing insurance carriers or eligibility requirements
• State laws affecting overtime pay, job classifications, or minimum wage go into effect.
• Your company merges with another company or has a change of ownership

If you have an employee handbook, make sure it reflects your changes.

How Can I Let Employees Know Our Personnel Policies?

Most HR professionals recommend giving all new hires an employee handbook during onboarding. The employee handbook contains all your human resource policies and procedures. You’re not required to have an employee handbook, but you should have written policies available for your workers.

Your employee handbook is a convenient way to inform new employees of your basic work policies and a good place to list all laws your workers must follow. Your employee handbook should include information about federal laws and agencies, including:

• Equal Employment Opportunity Commission (EEOC): The EEOC enforces federal employment discrimination laws​ and investigates charges alleging violations of those laws. Employees must be able to contact the EEOC if they believe they have experienced harassment or discriminatory behavior.
• The Family and Medical Leave Act (FMLA): Public agencies and businesses with 50 or more employees must comply with the FMLA. Eligible workers receive a leave of absence of up to 12 weeks to care for seriously ill family members or to recover from their own illness or injury.
• Workers’ Compensation Laws of Your State: Each state has its own workers’ compensation laws. Your workers must know how to file a claim and where to go to see the company doctor.

Business owners often have their employees sign for their handbooks. In the event of legal action, the employer has proof that the worker knew of the company policies.

Are Performance Reviews Part of Personnel Policy?

Your personnel policy should explain when employee evaluations occur and how management evaluates employees. Focus performance reviews on tangible, measurable work elements to avoid legal issues. For example:

• Work quality, productivity, meeting and exceeding sales goals
• Customer service, positive and negative interactions with clients, customer reviews
• Punctuality, reliability, absenteeism, abuse of leave policies

A performance review is not the same thing as a disciplinary hearing. It should focus on strengths and weaknesses and set goals for the employee to work toward before the next review.

For instance, a worker may have excellent customer service skills but lag in sales goals. In that case, the employee and manager should work together to determine why the employee is struggling to close sales and address the issue. Your personnel policy or employee handbook should distinguish between performance reviews and disciplinary actions.

Is Disciplinary Action Part of a Personnel Policy?

Employee discipline is a critical part of human resource management. Your personnel policy or employee handbook should clearly explain your disciplinary policy and the steps involved in the disciplinary process.

To avoid legal issues later, consider making your disciplinary policy a separate section of your handbook or workplace policy manual. This way, employees can’t claim they were unaware of the policies or potential violations. Ensure your HR team addresses violations quickly and treats all employees equally when a violation occurs. This helps avoid claims of discrimination or favoritism.

Getting Legal Help with Personnel Policies

An experienced employment law attorney can provide invaluable support by:

• Reviewing your current policies to identify potential legal issues
• Drafting a legally compliant and comprehensive employee handbook
• Advising you on how to handle sensitive issues like discipline and termination

A qualified employment law attorney​ can examine your policies, ensure they’re fair, and represent you if necessary.