What belongs in an employee handbook

An employee handbook is the document that answers "how do things work here" so that the answer does not depend on who you ask. Small companies put it off because it sounds like a legal project. It is mostly a writing project: collecting the decisions you have already made, in one place, in plain language. Here is what goes in, what the law requires, and what to leave out.

What the law requires versus what is useful

Most of a handbook is not legally mandated; it is simply the written version of policies you need anyway. A few pieces are required or close to it:

• A Prevention of Sexual Harassment policy, with the Internal Committee composition and the complaint process, for any workplace with ten or more employees. See our PoSH basics guide.
• Leave rules consistent with the state Shops and Establishments Act that applies to you, or the Factories Act where relevant.
• Working hours, weekly off and overtime rules, again per the applicable state law.
• A code of conduct and disciplinary procedure, which is not strictly mandated for most small establishments but is the basis for any fair disciplinary action; without a written procedure, every termination for misconduct is weaker.
• A data protection and privacy notice covering what employee personal data you collect and why, which the Digital Personal Data Protection Act makes necessary.

Everything else is useful rather than required, which is also why it is the part that gets read.

The sections

1. Welcome and how to use this document. Half a page. What the handbook is, that it applies to all employees, that it sits alongside the individual employment contract, and what wins in a conflict (usually the contract for individual terms, the handbook for general policy).
2. Employment basics. Employment types, probation and confirmation, working hours and the hybrid model, attendance recording, notice periods by level, and the exit process. Link to the detailed probation and offboarding processes rather than repeating them.
3. Leave and holidays. Each leave type, its entitlement, accrual, carry-forward and encashment rules, how to apply, and the holiday list mechanism (fixed holidays plus restricted holidays). This is the section people open most; make it the clearest.
4. Pay and benefits. When salary is paid, how the salary structure works at a high level, reimbursement rules, statutory benefits (PF, ESI, gratuity, maternity), and company benefits such as health insurance. Do not put amounts that change yearly into the handbook; point to the current annexure.
5. Expenses and travel. The policy in brief, with the limits in an annexure. Our expense policy guide covers the details.
6. Code of conduct. Expected behaviour, conflicts of interest, gifts, moonlighting and outside work, confidentiality, use of company assets, social media. Written as principles with a few concrete examples, not as a list of prohibitions.
7. Harassment, grievances and whistleblowing. The PoSH policy in full or as an annexure, the general grievance route, and how to raise a concern about wrongdoing confidentially. Say who receives complaints and what protection from retaliation exists. See the guide to a whistleblower policy.
8. Discipline. The steps: informal conversation, written warning, final warning, termination, with the right to respond at each written step. Which misconduct is serious enough to skip steps. Who decides.
9. IT, data and security. Acceptable use, passwords and devices, personal data handling, what happens to accounts on exit.
10. Performance and growth. The review cycle, how increments and promotions are decided at a high level, learning budget if any.
11. Health, safety and wellbeing. Office safety basics, what to do in an emergency, any employee assistance or mental health support.
12. Acknowledgement. A page the employee signs, or an electronic acknowledgement, confirming they received and read the handbook. Collect it at onboarding and after every major revision.

How to write it

Write in the second person and in plain sentences. "You can carry forward up to 15 days of earned leave to the next year" beats "Employees shall be permitted to carry forward a maximum of fifteen (15) days of Earned Leave". If a lawyer reviews it, ask them to check the substance, not to rewrite the voice.

Keep the main document stable and put everything that changes in annexures: the holiday list, expense limits, insurance details, the Internal Committee members. The handbook then needs a revision every year or two; the annexures get updated when the facts change.

Where a policy involves a workflow, describe the outcome in the handbook and let the system carry the steps. "Apply for leave in the HR portal; your manager approves within two working days" is enough; the portal itself handles the form. Publishing the handbook inside the same employee portal people use daily means they actually find it, and policy acknowledgements can be collected there instead of on paper.

Keeping it alive

A handbook nobody has touched for three years is read as a historical document, and people stop consulting it. Three habits prevent that: give it a version number and date on the cover; assign one owner who reviews it every twelve months and after any legal change; and whenever a manager answers a policy question that the handbook did not cover, add the answer. The second-best handbook is the one that gets updated. The best is the one that gets updated and is short enough that people read it.

What to leave out

Anything that belongs in the individual contract, such as salary and specific restrictive covenants. Aspirational culture statements that nobody will enforce. Policies you do not actually follow; a written policy you ignore is worse than no policy, because it proves you knew. And legal boilerplate copied from a larger company's handbook, which usually references committees and processes you do not have.