If your employer requires its employees to sign employment contracts, it’s important to make sure that it covers all of these basics. And whether you’re a small business or a start-up, you should implement employment contracts to make sure that everyone’s interests are legally covered. Here are seven provisions to include in an employment contract.
1. Job Description, Duties and Responsibilities
Employment contract lawyers suggest that all employment contracts clearly outline what is expected of them in their position. It should give the official job title, job description and detailed employee responsibilities. Education requirements and how job performance will be evaluated are also typical parts of this section. Employees need to know what will be asked of them and be capable of fulfilling the tasks.
2. Extent of Services
It is necessary to specify whether a position is full time or part time, an independent contractor, contractor or temporary hire. There should be a defined start date and end date if applicable. Employment contracts also need to include the hours and days the employee is expected to work. This will often include a clause that states that employees are not expected to work for any other employers without approval.
3. Compensation and Benefits
One of the most obvious inclusions in any contract is the pay. Contracts should specify the wages, how frequently wages will be issued and whether or not pay increases are possible. Employers also need to detail any benefits that are part of the employment. This includes things like health benefits, retirement funds, stock shares, life insurance and more.
4. Vacation and Leave Allotment
Working isn’t working if there’s no time off. Employers must allow vacation and leave. Keep in mind that these may not always be paid time off. It should also inform employees on how to request time off and what procedure to follow when unforeseen circumstances arise that may require an employee to not show up or leave early.
Confidentiality agreements and non-compete clauses are often part of many contracts. This protects the employer’s interests. Depending on the type of work, it may be necessary to include other restrictions and clauses. For instance, some employers may need to include a clause governing the use of technology or social media.
No relationship is without difficulties from time to time, and that’s why a well-designed employment contract will include a clause regarding how disputes will be handled and how disciplinary actions or penalties will be enforced. It should also include the option for arbitration.
7. Termination and Severance
All parties involved need to know on what grounds an employee can be terminated and the notice required from either party. The contract should detail what severance the employee is obligated to offer an employee upon termination under specific conditions, like layoffs and the company folding.
These seven provisions provide the basic foundations to build an employment contract around. Defining the professional relationship between employee and employer can prevent a lot of misunderstandings and help navigate tricky situations.