An employment agreement is a legally binding written document that is signed by both the company and the employee. Employee agreements are essential when hiring a worker because it allows companies to put out the ground rules to new employees and to set appropriate expectations.
So you’ve landed the perfect job or’ve discovered the ideal employee. The question is, what’s next? The final and the final step in a recruiting process is to furnish an employment contract so as to formalize the agreement between both parties and to “seal the deal. “
What Are the Benefits of Having an Employment Agreement?
Employment agreements can be quite beneficial for companies who wish to keep employee loyalty and that wish to make sure that employees don’t go on AWOL. This is particularly true among companies who have paid a whole lot to recruit or train a worker and doesn’t wish to go through additional costs and added time in looking for a replacement.
Among the perks of a worker contract is the fact that it helps lock down a worker for a particular time frame or requires a worker to provide due notice, typically about thirty or ninety days, in order for companies to locate a replacement and also to train him. Other job contracts impose fines on employees who snore before the agreed time frame, and, although you cannot force employees to stick it out with you, tripping penalties can make them think twice about leaving your employ earlier than anticipated or sitting it out a little.
An employment contract also plays a very important role in maintaining confidentiality within the office or at the company. Most employment contracts contain confidentiality clauses and non-compete exemptions to secure sensitive and private information such as trade secrets. Confidentiality clauses are clauses that forbid or prohibit an employee from leaking or disclosing any type of information that is related to work for personal gain while a non-compete clause prevents an employee from competing against you or working for a rival company after leaving your employ.
At times, an employment contract can be used to sweeten a bargain so as to lure a candidate into working for you rather than working for the contest. This can be done by offering a more aggressive compensation package, job security, and extra bonuses or benefits. You might also use employment contracts to obtain control over an employee’s level of performance and productivity in order for you to set a specific type of standard that the employee should attain in order to be kept within the company.
Employment agreements or employment contracts typically contain details such as the worker ‘s name, the worker ‘s starting date, the amount of salary, schedule and work hours, attendance and leaves, and provisions pertaining to the security of their company’s assets and confidential advice.
Employee Contracts and What’s in Them
An employee contract is a legal arrangement which obligates a worker and an employer. An employee contract generally states particular subtle components such as the terms and conditions that commits both the company and the employee to shoot after. The moment a worker is hired, a worker contract must then be built to bind the employee to the company.
Regardless of the fact that labour contracts are a typical piece of paperwork–particularly in the office –its contents, however, vary from country to country and from state to state. Since employee contracts are legally binding, they can be used contrary to a company when labor disputes arise. The following is a rundown of the basic things That Needs to Be integrated in a worker agreement contract:
- The Names of The Parties
An employee agreement contract typically commences with the names of both the company and the company or the association he’ll be connected with.
- Start Date
Including the worker ‘s date of hire will assist recruiters, companies, and even employees themselves to trace on the exact date that they began. The start date of the employee is considered to be the date once the contract takes effect.
- Job Description
The worker ‘s work position and his job responsibilities must be clearly defined within the contract. This helps to set appropriate expectations as to what is expected of him and to help prepare him for his duties.
- Work Hours
Workers should be provided a heads-up as to the amount of hours they are expected to work a day, in a week, or in a month. Most companies take a full-time employee to work at least 9 hours a day, 45 hours a week, and 180 hours a month while some offer a more flexible work schedule as long as the employee can supply outputs and complete their work on time or before the deadline.
- Compensation Package
Most employees usually check on the compensation package that is being offered by the employer before assessing the remainder of the contract. An employee’s monthly income is typically the clincher which makes a worker firmly decide on whether he should sign the contract or not. In addition, anything that entails salary deductions, incentives, cut-off schedules, and also the date of the month when pay is going to be given must also be indicated in the contract.
- Probationary Period and Regularization
Some companies have probationary periods before regularizing a worker. If such is the case in your company, then the provisions resulting in an employee’s regularization have to be properly mentioned in the contract such as the duration of the probationary status and the performance criteria that the employee should achieve in order for him to become regularized.
It is also important to disclose certain evaluations being done monthly, quarterly, or annually and the corresponding increase of salaries and incentives for good performance.
- Grounds for Termination
Terms and conditions relating to the termination of a worker have to be clearly defined from the contract. Unlawful termination may be grounds for labor disputes. Make sure that you properly set out expectations among your employees when it comes to your required standard of performance. For example, establishing an yearly performance evaluation which might assist you in discovering your worker ‘s worth to your organization and to help you assess if they are worth keeping or not. Good documentation of an evaluation result or action forms can help support the reasons for terminating an employee.
- Attendance and Leaves
Employees overlooking on work can cause an encumbrance among companies. Implementing and establishing rules pertaining to presence, non-attendance, and tardiness allows a worker to set appropriate expectations among his employees. The amount of leaves and vacation leaves must also be mentioned in the contract to help direct employees regarding attendance issues.
- Nondisclosure and Non-Compete Clauses
Most companies typically include a nondisclosure and also a non-compete clause inside a worker contract. Nondisclosure agreements prevents a worker from sharing or leaking sensitive and confidential information about the company to third parties or at non-work-related situations.
A non-compete clause, on the other hand, prevents a worker from working with a competitor or from competing directly with his previous company in a timeframe frame, usually for 1 or 2 years.
As a matter of principle, a worker contract must always be in writing. Though oral agreements are not prohibited by law, they are normally deemed invalid and therefore are difficult to prove in cases of uncertainty or if contested. Written contracts provide clarity and serves as a tangible piece of evidence whenever a dispute arises.
Some employment contracts don’t take into consideration every small detail associated with perform conditions and conditions and are often referenced together. Workers should be provided a copy of their employment agreement for their reference.
Before signing an employment contract, the employer and the employee usually discuss the conditions being laid out in the arrangement, providing employees a chance to ask questions or to request for amendments. Other employees take a couple of days to think about whether to sign a contract or not; however, when an employee willfully signs a contract, it is then taken as an agreement and an affirmation of acceptance to the agreement.
Employment contracts are all important documents which shouldn’t be dismissed. A great deal of companies have been affected financially due to lawsuits filed by employees because of loopholes found in labour contracts. Protect yourself and your company. Our agreement forms, job separation agreement types, employment agreement types, and executive agreement forms supply the most comprehensive contracts which cover the most critical features of an agreement.