What should be included in employment contracts
Your start-up is continuing to grow, so now it’s time for you to hire a few people. However, you don’t have a lot of experience with hiring – your current team has been built with a couple of industry friends. But you now would like to incorporate some strong HR practices to allow you to make smart hires.
Let’s begin by discussing the employment contract. The following are some things that should be included to help protect your business as well as your new hire when you make a job offer.
All employment contracts should include the following:
1. Job information
Some of the key information pieces that your contract should begin with include the job title as well as the department or team that the employee will be working with. Explain how the new hire’s performance will be evaluated and to whom they will be reporting to.
2. Benefits and compensation
Detail your benefits and compensation package. It should include the hourly rate or annual salary, information on raises, incentives, or bonuses, and how they can be obtained. Explain what is included in your benefits plan – medical, eye care, dental, etc. – what percentage is paid by the employee and the percentage paid by the employer.
3. Vacation, sick days, and time off policy
According to Net Lawman, there are a number of things you should do before you hire someone and explaining leave is among the most important. They recommend that you:
- Explain your time off policy thoroughly.
- How many paid vacation days does an employee accrue each pay period?
- Is there an increase in the number of vacation days with longer tenure?
- You should also explain what your expectations are about unpaid leave, family emergencies, and sick days.
- Are employees able to make up hours by working weekend events or after-hours?
4. Classification of employees
Define whether your new hire is a contractor or employee to ensure insurance and tax compliance. Many lawsuits have been faced by Uber due to the company’s employment misclassification, and it continues to have to fight it. Make sure you know what the differences are between contractors and employees, and classify employees properly from the very start so you don’t have any problems in the future.
5. The employment period and schedule
Your contract should clearly state whether employment is for a certain set term or is ongoing. It also should include when an employee is expected to work in order to define the specific employee-employer relationship.
Include the number of hours hat an employee is expected to work along with any flexible working options that your offer such as working remotely when out of town or working from home. If working weekends or nights is required by the job, explain how often and when.
6. Confidentiality agreement
Keep sensitive information protect such as client data or business trade secrets by having employees sign a confidentiality agreement as part of the employment contract. Rather than making it a separate piece of paper or contract, have it included as a section directly in the employment contract and have a field within the section where it can be signed digitally by new hires.
7. Technology privacy policy
Be sure to clarify what is acceptable and what is not when it comes to using email and social media on your company’s property. For instance, if you do not want your employees to use company mobile devices or computers to check their personal email or make updates to their own social medial channels, state this. If you don’t want employees saying negative things about work on any social media channels, prohibit this practice.
8. Terms and conditions for termination
Explain the requirements for both parties to terminate the employee-employer relationships, including how much notice is required and whether it needs to be in writing.
9. Outplacement or severance plan information
It might be somewhat early for you to think about it, but if your employee or you decide to go your own separate ways, you will want to do this is a nice way in order to maintain your positive employer brand. You consider offering an outplacement or severance plan.
It is always worth having a lawyer look over your employment contract contact for advice.
