The Ultimate Guide to Employment Contracts: How to Do Them Right

These documents can also protect your intellectual property and confidential information from unauthorized use by your competitors. From employment agreements to client The Importance of Accurate Bookkeeping for Law Firms: A Comprehensive Guide contracts, our guide covers the contracts you’ll need to legally protect your business. Florida businesses do not need employment contracts for all their employees.

Employment contracts can be very useful if you want control over the employee’s ability to leave your business. For example, if finding or training a replacement will be very costly or time-consuming for your company, you might want a written contract. It can lock the employee into a specific term (for example, two years) or require the employee to give you enough notice to find and train a suitable replacement (for example, 90 days’ notice). While you can’t force someone to keep working for you, an employee is likely to comply with the agreement’s terms if there’s a penalty for not doing so. If you don’t feel you fully comprehend what you are about to agree to, pause and consult with an attorney or another trusted person with experience in employment contracts.

What should you do if you get into an employment contract dispute?

While in the U.S. there are no legal provisions for the duration of fixed-term contracts, this isn’t the case internationally. Requirements of fixed-term contracts vary around the world, so it’s best to work with a legal specialist or lawyer if you are considering hiring an international person. Under a non-disclosure or confidentiality clause, the employee agrees to not disclose information that the employer deems confidential or sensitive to the business and to take reasonable steps to prevent disclosure.

According to one study, over half of respondents said that compensation is the top reason that they are looking for a new job or would consider leaving their current role. If you’re https://www.digitalconnectmag.com/a-deep-dive-into-law-firm-bookkeeping/ creating a brand new position, you’ll need to clearly define the scope of the new role. Start-up and emerging businesses often need to raise capital to fund their business.

Be a Smart Employer

In terms of compensation, the employment contract should spell out whether the employee will be exempt or nonexempt, which affects how they’re paid and whether they are eligible for overtime pay. If a business decides to use employment contracts for a portion of its employees, it should be careful. Using contracts for some and not others can present the impression of discrimination. For example, a company signs contracts with a termination for cause clause for its male executives. However, the female executives do not sign any type of employment contract and are at-will employees. If a business decides to use employment contracts for a particular group of employees, then all employees in that group should be treated the same.

This contract should set clear expectations on when an employee needs to report physically to work — will there be a fixed schedule like 3 days from home and 2 days in the office? What would be the attendance protocol if there are training programs or team meetings that are scheduled on the days the person is not expected to be in the office? Today, thanks to technology, your small business can benefit from a global and agile workforce. Yes, you can successfully run your business with the help of a virtual assistant in Indonesia and alongside a hybrid team member who might enjoy working out of coffee shops. However, this also implies that a general employment contract can’t be used everywhere.

Independent Contractor

Typically the American Arbitration Association, aka AAA, is specified as the exclusive method for the arbitration. Some employers require employees to sign a written agreement stating that they are employed at will — that is, that they can quit at any time, and can be fired at any time, for any reason that is not illegal. Employers might ask employees to sign an offer letter, handbook acknowledgment, or other document agreeing to at-will employment, for example. Significantly, these contracts provide some legal protections for employees. If an employer breaches the agreement, a worker may be legally entitled to damages or payout of their full contract value. Because of this knowledge gap, it’s essential business owners have a robust business liability policy in place.