Most people especially businesses do not really know the importance of employment contracts. No wonder the key parts of employment contracts are normally ignored. This is actually very wrong keeping in mind that the right employment contracts can go a long way in saving you thousands of dollars in cash. Well, this article will tell you all you need to know about employment contracts whilst paying particular attention to terms you must be clear about in employment contracts.
Part 1 What is an Employment Contract?
For starters what's an employment contract? Well, an employment contract is a written legal document that defines the employment relationship between an employer and an employee. In other words, this is a contract that is struck between an employer and employee and the contracts can be different in private and public sectors owing to the varying goals in the sector. That said, there are still some key terms that ought to be factored into employment contracts.
Elements of Employment Contracts
So, what are the basic elements of an employment contract? Well, employment contracts may entail virtually anything that an employee and employer wants included but here are some of the most vital ones in any valid employment contract:
Definition of the position
Any employment contract must clearly define clearly the job requirements of a particular position. This should also include the place and the hours of employment. The catch here is to use clear and concise language leaving no doubt to employees.
Length of the Agreement
It is also vital that the terms of extending, reducing or terminating the contract are clearly stipulated in the contract. Thus, these elements should be favorable to both parties involved in the agreement.
Compensation
This is also one very key element in any solid employment contract. This is to say that when you negotiate a contract, you should place the figures in the contract including the ways of payment. That is if the mode of payment would be hourly, salaried or commission based. In the case of the latter, it is necessary that you spell out the percentage clearly including how you will deal with withdrawals against commissions. Also, you should indicate how the termination of the contract will affect pending compensation.
Benefits
You should also spell out all the benefits you offer to your employees in the contract. This includes things like dental, vision and other insurances. In the case that professional licenses are a necessity in the job then spell it out well who will pay for the acquisition of this licenses. It is also good to factor in other items like holidays, vacations, stock options among others.
Termination
It may sound pessimistic but you must also take care of termination language in your contracts. Here you should define the repercussions in the case an employee decides to terminate the contract without the cause. You should also include cover the definitions of all scenarios coupled with the severance terms that apply in all the incidences.
Part 2 Terms You Should Pay Special Attention in an Employment Contract
There are some terms that you should very well keep an eye on and ensure that there are properly defined in a contract. Here are some of such terms:
Ownership Agreements
It is necessary that you define the ownership of property produced by the employee during employment. This is particularly important if the job involves innovation so as to avoid disputes and law suits.
Assignment Clauses
Just like ownership agreements, assignment clauses basically imply that patents produced by the employee during employment should be well spelled out. For instance, the patents may be assigned to the business but is this spelled out in the contract?
Nondisclosure Agreements
Just like ownership agreements, assignment clauses basically imply that patents produced by the employee during employment should be well spelled out. For instance, the patents may be assigned to the business but is this spelled out in the contract?
Part 3 Common Questions about Employment Contract
At what point does an employment contract exist?
Well, employment contracts start existing as soon as an employer offers some a job. This may be done verbally or in written form but the latter dispels any doubt. This may come in very handy in the case that any disputes arise.
Must I provide a written statement to everyone who works for me?
No, you are not mandated to provide written statements to each of your employees particularly independent contractors, freelancers and agency workers.
What are the 'implied terms' of an employment contract ?
These are the requirements that employees expect to exist without necessarily being spelled out in the contract. For instance, he or she will certainly expect a safe and healthy working environment. Others engulf things like loyalty, honesty, mutual trust, and confidence.
Part 4 The Best Tool to Sign Employment Contracts
You can sign your employment contracts using e-signature software. There lots of tools to do this but one that stands a cut above the rest is SignX, an e-signature software by Wondershare. The tool will not only let you sign your employment contracts but it will let you send the contracts to every relevant party and even track when they are opened and even signed. It is certainly worth a try if you want to strike legally binding e-signatures just like in the case of traditional ink and paper signatures.
In conclusion, employment contracts are important legal documents that should never be overlooked by any business. It is always safe to oust any ambiguity when striking employment agreements and what better way to do so than using contracts with very clear terms?
