You would think that separating potential employees from non-performing ones is the only process you need to do when recruiting employees. However, most states have mandated laws governing a person’s employment and having written contracts that stipulate the terms of employment is essentially required.
An employee contract is a written contract that lists down the different terms and conditions that both an employer and an employee should abide by. You can download our Agreement Forms to look for sample contracts to use.
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An Employment Contract is important because it provides a sense of security for employees. Having a written contract gives the impression that they are working for a professional company that has clearly defined their terms and conditions as well as their expectations from employees. This also helps in retaining employees because, although you cannot force employees to stay, you will at least get a 60- to 90-day notice if they decide to resign, giving you ample time to look for a replacement and to train him. Also, an employee contract can secure businesses with their interests. Being able to set terms, conditions, and regulations to their employees will help businesses to be straight up and strict about what they expect from employees especially when it comes to productivity, performance and even in resignation.
What Should Be Indicated in the Agreement?
Employment agreements typically vary according to the company and according to the negotiations made between an employer and an employee. However, basic details need to be included in the written agreement such as the following:
The Names of the Parties Involved. Naturally, an employment contract should begin with the complete name of the employer and the name of the company.
Date of Hire. The employee’s start date is necessary, especially since this indicates the date wherein the employee should start to get payment for his services.
Job Title. The employee’s job title along with an enumeration of his core responsibilities at work should be indicated in the contract in order to set proper expectations between the employer and the employee. The employee will not be obliged to perform tasks that are not indicated in his employment contract.
Schedule and Number of Working Hours. Employees should be well aware of their schedules. This will help them to minimize or veer away from being late. The working hours, break schedules, and compensation for overtime shall be listed accordingly so there will be an understanding between the employer and the employees with regards this matter.
Compensation Package. Monthly salaries, deductions, incentives, schedule of cut-offs, and dates as to when pay will be given should be clearly stated in the contract.
Non-Compete Clauses. Non-Competition Agreement Forms or clauses prohibit employees from working for a competition company or from setting up their own company under the same line of business for a period of at least two to three years.
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Probationary Period. Some companies have probationary periods wherein the employee is being observed prior to regularization. Probationary periods usually last for three to six months. Details and rubrics relating to an employee’s regularization should be stated in the contract to let employee’s know how they will be evaluated for regularization and what are the terms used to base an employee’s regularization.
Attendance and Leaves. The employers have the right to specify the number of sick and vacation leaves that employees can enjoy as long as the numbers being given follows the regulations and laws within the country or state where the business is located. The absence and leaves of employees can affect the operations which is why it is essential for attendance and leave credits to be planned and plotted out accordingly.
Non-Disclosure and Restraint of Trade Clauses. Most employers provide a non-disclosure clause or even a restraint of trade clause. These clauses are important as they protect the business most especially when it comes to the protection of private, sensitive and confidential information.
Save time and money and steer clear from the hassle and the inconvenience of having to make your own Employment Contract by downloading our Employment Application Forms and other contract templates such as our Contractor Agreement Forms.
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