An employment contract is one that you will have any new, potential employee sign agreeing to work for you. This contract will establish both the responsibilities and rights of those in the contract.
Your contract will describe what the employee will do for you, and it will also say what your obligations are to them. The terms of employment should be spelled out in this document as well.
What are important topics to include in an employment contract?
A good employment contract will include information on:
- The employee’s wage or salary
- Commissions that may be earned
- The employee’s schedule and any hours they may be expected to work
- How long the employment will last, if there is a defined term. If there is a term length that could be extended in the future, this should be mentioned as well.
- Noncompete clauses, which will state if the employee can go with competitors and what will happen if they violate the noncompete agreement
- Benefits that the employee may be entitled to
- The employee’s responsibilities while on duty
You may choose to include other information that you believe would be helpful to the employee.
Do you always need an employment contract?
Some people may not think that an employment contract is necessary, but it is a good idea to have one in place. The employee needs to sign the contract to show that they read it and agree to the contents.
As an employer, having someone sign a contract with you helps protect you. However, that contract does need to be written correctly and signed under the correct circumstances. It’s a good idea to take the contract you want to use to your attorney to have it reviewed before you have anyone sign it.
Your attorney may have some additional clauses that they believe you should add, or they may need to make changes to keep the contract in line with state law. Taking the time to make sure the contract is correct before using it will help mitigate the risk of litigation in the future and help you to protect your company.