Company Policies Business Owners Should Consider

As a business owner, you must create company policies and plans to enforce them to ensure your company operates as smoothly as possible. Check this out for more information on both.

Company policies are standards that establish expectations for workplace norms. These standards are meant to serve as guidelines for behavior, safety protocol, and other standard operating procedures. 

There are a few company policies we will cover later that are required by law, but you should also create your own based on the needs of your business. The policies you enact will contribute to company culture, so keep that in mind as you envision what you want your business environment to be.

Why Are Company Policies Important?

Company policies are important for a variety of reasons.

  1. Establish safe work environments
  2. Ensure legality and compliance
  3. Provide clear expectations

Establish Safe Work Environments

It’s simple: when employees feel safe, they perform better. Studies show that the less stress the brain experiences, the better it will perform. This means that if your employees are not stressed about their safety at work, they are more likely to complete tasks more efficiently and effectively.

Now, this is not to say that work should never be stressful. Sometimes that comes with the territory. However, stress should not stem from a lack of safety. This is why you need to have policies in place to protect the security of your employees.

Ensure Legality and Compliance

When running your small business, you must educate yourself on laws that might apply to you. Federal law prohibits several types of discrimination, so it is important to stay up-to-date on those laws to remain compliant.

As a business owner, you have rights, but your employees have rights, too. Keep both ideas in mind as you create expectations for your business operations. 

Provide Clear Expectations

Your employees must understand the expectations of your business. When provided with guidelines, they will know what behavioral and performance standards to follow and how they are protected.

Expectations can include smaller things like dress code to larger aspects like codes of conduct. Keep reading for suggestions on company policies to consider adopting for your business.

Which Company Policies Do You Need To Have?

You will be held to slightly different small business regulations depending on the size of your business. However, for the most part, you must follow the following federal legal policies.

Equal Employment Opportunity

The Equal Employment Opportunity Commission (EEOC) enforces Title VII of the Civil Rights Act, which prohibits workplace discrimination. This federal law forbids discrimination based on:

  • Age
  • Disability
  • Genetic Information
  • Sex
  • Pregnancy
  • Race
  • Religion
  • National Origin

This means that when you hire a new employee, they cannot be treated unfairly based on any of those aspects.


The EEOC also provides guidelines for ensuring an anti-harassment environment. You should know that harassment will not be tolerated within your business to protect you and your employees. Behaviors that qualify under harassment are:

  • Offensive, intimidating, hostile, abusive conduct
  • Physical threats and workplace violence
  • Racial slurs, epithets, name-calling
  • Sexual requests and verbal or physical advances

Remember that as an employer, you are responsible for keeping your business a harassment-free zone. This means that if you become aware of harassment in the workplace, you must take immediate and appropriate disciplinary action. 

Equal Pay and Compensation

Another aspect protected by the Equal Employment Opportunity Commission is employee pay. Whether you have employees who work for hourly or salary pay, you are legally required to pay them equally for doing the same or similar job. On top of wages, this policy also protects:

Another important thing to note when dealing with equal pay is how you make things equal. For example, if a male employee is being paid more than a female employee, you may not lower your male employee’s pay. Rather, you must raise the female employee’s salary to equal it.

What Are Some Other Policies To Consider For Your Business?

It is still a good idea to have guidelines and expectations for your employees regarding non-legal policies. Again, setting a standard to guide employees through expectations falls under best practices that help create a successful business. 

Consider creating policies for:

  • Social media
  • Safety
  • Conduct 
  • Time off
  • Disciplinary action

Social Media

Social media is interwoven into society so setting boundaries is helpful for you and your employees. Keep in mind that there are legal limits to what you can and can’t monitor regarding your employee’s social media.

What you can do:

  • Make it clear that employees cannot speak on behalf of the company and that views expressed must be their own
  • Ensure employees maintain company confidentiality
  • Encourage employees to conduct themselves appropriately and respectfully

What you can’t do:

  • Regulate an employee’s views and speech unless they qualify as intolerant, violent, or dangerous

Laws on how employees deal with social media conduct vary from state to state if you run into issues with an employee’s social media use, research how to handle it based on laws in your area.


Conduct and occupational safety policies should be a natural part of your day-to-day business operations. The Occupational Health and Safety Association (OHSA) recommends a few aspects to implement in your policies, such as:

  • Leading by example and exemplifying safe practices
  • Providing employees with the necessary training
  • Creating a reporting system
  • Collecting employee feedback 


Setting expectations is important because employees understand how they are expected to behave in the business environment as they join your business. Creating a code of conduct and holding your employees to that standard builds a positive work environment for everyone involved. 

Consider including guidelines for:

Time Off

In a business setting, time off can include several types of leave. When creating policies for this subject, your regulations will depend on the state where you conduct business and the types of employees you hire, like hourly or salary. 

Either way, here are some time off situations you consider creating policies for:

  • Family and medical leave
  • Holiday pay
  • Sick leave
  • Vacation leave
  • Paid time off

Disciplinary Action

Disciplinary action policies are necessary to have, so employees understand guidelines for both conduct and performance expectations. This will also help with legal requirements, so you state your rights as an employer, and your employees know their rights in certain situations. 

When creating disciplinary action policies, here are some things to include:

  • Overview
  • Types of disciplinary action with summaries
  • Detailed action steps
  • At-will employment
  • Right to appeal

How Do You Write Company Policies?

It’s a good idea to create an employee handbook. Supply employees with this handbook at the beginning of their onboarding process.

A loose template for a company handbook includes:

  • Table of contents
  • Mission statement
  • Handbook’s purpose
  • Equal Employment Opportunity policy
  • Anti-harassment policy
  • Equal pay and compensation policy
  • Social media policy
  • Safety policy
  • Conduct policy
  • Time off policy
  • Disciplinary action policy

If you have any other policies specific to your business, you should also include those.

In addition to giving employees the handbook, you should have a form for the employee to sign confirming they have read the handbook. Because of the document's contents, you’ll need written consent for your records. This is a best practice for routine documentation, but you will also have it should any legal issues arise. 

How Do You Enforce Company Policies?

Creating company policies is the first half of the battle, and the second half is enforcing them. There are three components to consider when implementingcompany policies: 

  • Human Resources
  • Consistency

Human Resources

If your small business has a human resources department, enforcing company policies is a huge part of their job. They are responsible for knowing the policies and ensuring that your business and employees comply with them. 


Whether you do or do not have a human resources department, consistency is key when enforcing rules. Employees see you as their leader, so when you show your employees equal treatment, they are more likely to respect you and your business’s policies. 


Creating and maintaining company policies is essential to conducting a successful business. Regarding safety, legality, and a positive work environment, best practices must be in place to ensure your business runs smoothly. 

As a business owner, educate yourself on the policies you must have and make the best choices for guidelines that you can have. 


Protect Your Brain From Stress ⎸ Harvard Health Publishing

Small Business Requirements | US Equal Employment Opportunity Commission

Safety Management - 10 Ways to Get Your Program Started ⎸ Occupational Health and Safety Administration

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