How to Write a Comprehensive Employee Manual

The employee handbook is an important communication tool. If written well, it can show potential employees what they can expect while working for your restaurant, and what will be expected of them. It should contain a lot of information that is concise, easy to read because it’s well-organized, and it should serve as both a teaching manual as well as a legal shield to protect you as much as possible from potential lawsuits.

Here are a few of the things it should include:

Open Line of Communication

The most important aspect of a powerful and functional team is open communication. Make sure employees know they can talk to the owners and higher management about anything; and make sure they know that they are expected to report anything they see that may be breaking the rules. This is very important for stopping sexual harassment in its tracts, as well as a host of other issues such as workplace violence, unsanitary kitchens, or safety issues, which leads us to the next topic…Be encouraging and positive, letting them know you have an open door policy.

Creating a Safe Work Environment

Just as we discussed in the chapter on worker’s comp. insurance, creating a safety culture is very important. This area should list the phone numbers where they can receive medical assistance, and how to respond to emergency situations such a hold up, cuts or bruises, or a fire. It can show easy to read guidelines for safety (for example how to lift heavy objects), and how to reduce injury. As an option, you can outline bonus schedules for the teams that go for a certain period of time without injuries.

Non-Disclosure Agreements (NDAs) and Conflict of Interest Statements

These helps to protect your trade secrets and company proprietary information. Make sure specialized chefs and anyone that will have access to your secret ingredients sign this. They should never be allowed to take your trade secrets and go sell them to another company.


Clearly show how people will be paid, and at what time. Show potential bonuses and pay schedules, and state the minimum wage for your state and all laws here. Also list anti-dscirimation laws, and show that hiring and compensation will never be affected by age, race, color, creed, religion, sex ..etc

Standards of Conduct

This section should not only show that professional conduct is required at all times by your employees, but it should also contain what is expected of them in your business. Not all businesses are the same, so this section should be a little different in every business. For example we do not allow chewing gum behind the counter because we deem it unsanitary. That may not be so for a teenager working at a clothing shop, etc. A tight top is not allowed while working at a bank, while it is the uniform for a waitress working at Hooters. Every business is different. Make sure your company’s values and culture are reprinted well by the way people dress and act as employees.

Leave Room for Improvement

Just like everything else, there is always room for improvement on your Employee Manual. Let people know it will be updated regularly and is subject to change without notice. Copyright the agreement itself with your lawyer to make sure people don’t copy all your ideas.

Include Mission Statement, Values Statement, and By-Laws

As a document of important communication the Employee Manual should detail what the company stands for. The mission statement, values statement, and company by-laws can evolve over time and thus it would be great to keep records of them here and to make sure everyone is always looking up to the standards they are expected to live by, inside and outside the job. Make sure to include new media here, and some guidelines against defamation of the company’s good name on social media (or anywhere else) on duty or off-duty.

General Employment Information

Your employee handbook should include an a overview of your business and general employment policies covering employment eligibility, job classifications, employee referrals, employee records, job postings, probationary periods, termination and resignation procedures, transfers and relocation, and union information, if applicable.

The POS System and Credit Cards

As a general rule, employees are not supposed to retain credit card numbers or their expiration dates. If your company allows them to do this and there is any repeated pattern of theft, credit card companies have the right to refuse working with you and cut off all lines of credit. Considering there are only 4-5 major credit card companies, you don’t want this to happen. Be very careful with retaining information on the POS systems and who has access to them. Point out correct procedures here and let employees know they are expected to follow them regarding the POS system.

Contact Information

Make sure employees know where to point people for the right information. Often this is your company’s web site. We don’t allow employees to give out our phone numbers, for example, although it still happens occasionally. There should be one source of contact for all things marketing, once source for insurance, etc. List the names and phone numbers here.

Employee Benefits

List all the employee benefits here. Do you have a 401 K program? Is there a health care provider for all employees that can give them a discounted rate? Do you cover time off for pregnancies? All of that information should be listed here.

Leave Policies

Family medical leave, jury duty, military leave, and time off for court cases and voting should all be documented to comply with state and local laws. Also explain your policies for vacation, holiday, and sick leave.

Legal Review 

Make sure a qualified lawyer reviews this employee manual. Often they can point out legal materials your forgot to provide, or your state’s mandatory tax, anti-dscirimation, and ADA laws you forgot to include.

Let them help you include a paragraph disallowing class-action law suits in lieu of a fair, dispute-resolution mediation service every employee should be required to sign.

In short, whatever is in your best legal interest to include, you should include.

Now publish the Manual in English and Spanish to make sure everyone understands their rights, privileges, duties, and responsibilities. Then say a prayer and begin work.

Resources: 1) The Small Business Administration web site


Start with good people, lay out the rules, communicate with your employees, motivate them and reward them. If you do all those things effectively, you can’t miss.
Lee Iacocca

The Different Types of Ownership

There are three types of ownership which reprints how your restaurant can be classified as. If you do nothing, and simply open a business and start working right away, these will generally be classified as a sole proprietorship, which is estimated to compromise

Sole Proprietorships one person owning and operating a business (Advantages: ease of start/ending business, own boss, less regulation / Disadvantages: unlimited liability, limited financial resources)

Benefits of Being a Sole Proprietor

The benefit is you are individually responsible for everything, so you decide the marketing budget, the menu, who to hire and fire, where the locations should open, etc. A highly profitable business means you reap most of the benefits and do not have to share your earnings with a franchise company, a board of directors, or partners.

The obvious drawback to this is, since it is only you (or in many cases a family business, which is still classified under sole proprietor in most cases), you are also fully responsible for all taxes, legal liabilities, and employment related issues. Make sure to save enough money to pay a huge tax windfall you will owe at the end of each year for social security, state and federal taxes, and premiums on workers’ compensation insurance.
Partnerships are legal business with two or more parties. What I see in my personal experience is that in partnerships it’s usually classified as a partnership for one of three reasons:

1) The business is started by siblings (two brothers, two sisters…etc). These kinds of businesses start positive, but due to the high volume of stress restaurants or any other food or bar business typically bring upon its owners family relationships tend to suffer. think twice before opening a business with your siblings. In some cases it works beautifully, but more often than not, tragically, it ends with huge legal fights and breaks up families.

2) Some partnerships are made of people that come from totally different backgrounds. For example in our catering business chapter (Let Them Eat Cake), we saw how this can work. If you are great at marketing but terrible at cooking, you would need a chef to partner with. In some cases this can work beautifully, but beware partnering with n eddy people that want to use you just to get their feet in the door but don’t want to do an equal amount of work.

3) Partnerships are often formed in businesses where it is really tough to do anything alone, for example law firms and medical practices. Often you have dentists that are married and share an office, or similar family situations. Many of these “form a partnership for the convenience of it” types open up partnerships as a married couple.

Just as the previous examples, be very careful about this. Marriage is difficult enough as it is without mixing the stresses of work into the equation. It can work, but requires tons of care and effort.

(Advantages: shared financial resources, equal and divided risks, no special or added taxes / Disadvantages: unlimited liability, profits are equally shared, disagreements due to emotional stress and potential conflict of interest)

Corporations are legal entities with their own social security number. Often they are treated like citizens by the government; they are taxed, they are considered a separate entity, and they can even be convicted of crimes and fined just like an individual.

The advantages are that they have a limited liability, usually gain more money to invest from huge investors, they recruit talented employees, and corporations usually (though not always) outlive their founders by many decades. Longevity is much easier for established corporations than sole proprietorships.

Disadvantages: double taxation, usually expensive to incorporate with tons of required paperwork both with the government and the IRS, and sometimes they get too big to make quick decisions, falling prey to newer businesses with quick thinking. That is to say, they are slow to change (thinkMc Donald’s and how it’s been losing money for years now without being able to change the quality or the perception of their low quality as a brand).

Resources used for this blog: