5 Things That Your Employment Contract Should Have

In an ideal world, the hiring of an employee will be concluded by a handshake. That’s a shout-out to the belief that men and women will work to better any working relationship rather than one-up another person to climb the corporate ladder. But all that is in the past. Today, no agreement cannot be done without a formal contract. Even engagements and marriages have formal contracts that bind the parties to the terms and agreements.

The employment contract is, perhaps, the most important one you will draft in your professional life. If you are in the process of hiring people for your business, an employment contract will protect your rights and prevent any future legal proceedings that might arise from your actions and inactions. Of course, your contract should be well within the ambits of the law. Otherwise, it would not be binding.

Most small and large businesses need to hire a competent labor lawyer to draft an employment contract. If this isn’t something that is possible for your small operations, you can download legal documents online. You just have to make sure that the templates for these legal documents follow the state laws where you are operating the business. A simple Google search will yield sensible results.

The most common things in an employment contract are, of course, the job description, salary and benefits, hours, termination of service, and hours and location of work. You can find these in almost all contracts you can download from the internet. But well-thought-of contracts will also have these five crucial items:

Conflict of Interest

It is not usual to find this clause in an employment contract. Some small businesses think it’s a given that employees won’t work against the interest of their employers. This section in the contract applies both during the employees’ working hours and off-hours. It includes not working for another employer during business hours, not take another job that is in competition with the employer, and not work in a situation where the employees’ personal interests are in conflict with the best interest of the business.

Job Poaching

This is a serious problem in the corporate world. Job poaching occurs when an employee leaves the company, transfers to another, and convinces other employees to follow them there. Think about the Pied Piper. That’s how this form of recruitment works. This clause will prevent employees who left their jobs to actively recruit their former colleagues. Of course, this does not mean your existing staff cannot apply for a job in your former employee’s new company, but it provides some form of protection.

Dispute Resolution

business owners

In 2016, the US Equal Employment Opportunity Commission said that over 61,000 cases involving employee contracts were filed against employers. Disputes in employment happen all the time. However, if you have a dispute resolution clause in the employment contract, the employees will have to seek mediation and negotiation to resolve the issue. Usually, both parties will have to do the process with a professional mediator whose goal is to help the parties arrive at a settlement.

This clause prevents employees from outrightly filing a case against the employers on grounds associated with the employment contract. It protects the employers from having to face a legal case that arises when one of your employees questions the fairness of a business decision. Instead, the mediation process is a fair process for everyone involved.

Use of Business-owned Technology

Not that you’re being possessive or selfish of the devices the company lends your employees but allowing employees to use corporate-issued laptops and smartphones can result in hacking and phishing. They might visit unsecured websites that will make your whole system vulnerable to cybercriminals. This is more of a protection for your business rather than being a controlling manager.

At the same time, you can also add a clause in the contract wherein your employees will not be allowed to share and post negative thoughts about the business. This has been a growing concern for many businesses in the past year. It is legal to ask employees not to air out the company’s dirty laundry in public.

Intellectual Property

One of the tasks of your employees is to come up with ideas and strategies for the business. Sometimes, those ideas will have a physical output such as a logo, written content, images, processes, designs, and symbols. Make sure that you have intellectual property rights for everything that your employees will create while they are in your employ. If you don’t, they can take these with them when they leave your company and sell these materials to other companies.

Make sure you have these five items covered in the employment contract. It’s better to talk it over with a labor attorney. However, if that is not possible, the internet is full of relevant resources that will help you come up with the right terms and conditions in your employment contract.

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