Hiring an employee – or being hired – is far more than a financial relationship. It is a legal arrangement that provides something to both parties. The business owner gets the benefit of the skills, talent, and efforts of their employee and the employee receives compensation for the work that they do. Employees have legal protections that have been bestowed on them by the government, but both sides can be further protected by the terms of an employment contract.
A good legal contract will set out all of the terms and conditions between two parties, and that is just as true of an employment contract as of any other type of binding agreement. Not only will it include basic information on the employee’s role and compensation, but will extend to delineate specific obligations, protections, and restrictions that both parties agree to.
A good employment contract will be both detailed and fair to both parties. That’s why it’s a good idea to have your employment contract crafted by an attorney with experience in representing both employers and employees. Contracts that are unclear leave both sides at a loss, and terms that are overly restrictive of employee rights have a good chance of being viewed as unreasonable in the face of litigation.
A good employment contract will address several key features, including:
- Terms of employment – This will define whether the individual is an employee or a contract worker, as well as the start date and terms of termination.
- Employee responsibilities – Though it is tempting to skip this feature and use one employment contract for all employees, the significant difference between roles within an organization demand that each employee category has its own contract that spells out both the individual’s general responsibilities and any specific benefits or restrictions that may apply.
- Employee compensation and benefits
- Details regarding employee absences, including sick time, personal time, vacation time, and family medical leave.
- Ownership of work product – This ensures that the employer maintains ownership of work created or contributed to by the employee.
- Nondisclosure – If the employee is exposed to trade secrets, client lists, or other proprietary information, nondisclosure prevents them from sharing this information.
- Noncompete limitations – This may restrict an employee from working for competitors, within the same industry, or within a defined geographic area. It is important that these terms are carefully crafted, as any terms that effectively prevent an employee from earning a living in the future are likely to be considered unreasonable and unenforceable.
If you need assistance in crafting an employment agreement, our experienced attorneys are here to help. Contact us today to set up a time for a meeting.
