Employment Contracts: Best Practices for Employers and Employees

What are two common features of an employment contract?

Here’s what you should include when writing a contract agreement: Job responsibilities: A general outline of tasks and duties. Duration of employment: Such as seasonal, defined (for example, two years), or indefinite.

Employment Contracts: Best Practices for Employers and Employees

An employment contract is a legally binding agreement between an employer and an employee. It outlines the roles and responsibilities of each party, any perks associated with the job, and details about salary, benefits, and termination. Employment contracts help to protect both parties and ensure that everyone is clear about the terms of the agreement.

For employers, crafting individualized and detailed contracts is important for setting expectations and protecting the company from legal and liability issues. Here are a few best practices for employers when drawing up employment contracts.

• Clarify job duties. Clearly spell out the job title, specific duties, expectations, and performance standards.
• Include non-compete and non-disclosure clauses. If the business has confidential information or processes that they need to protect, these clauses are essential.
• Outline payment and benefits. Include any salary or bonuses, vacation or sick days, health and disability benefits, and retirement plans.
• Explain termination rights. Set out the conditions for termination, including reasons for termination, any required notice period or warnings, and whether the termination is immediate or effective in a set period of time.

On the employee side, it’s also important to be aware of best practices related to employment contracts. Here’s what employees should be mindful of when signing an employment contract.

• Read and understand the entire contract. Make sure you are up-to-date on any changes that have been made, and note any difficult clauses.
• Be conscious of termination rights. Make sure that you understand the conditions of termination and any notice period that is required.
• Clarify job duties. Ensure that the duties that you have agreed to are clear, and that you are comfortable with the expectations.
• Shoot for fair compensation. Negotiate for a salary, raise, and benefits that you think fairly reflects the work that you will be doing.

Employment contracts are essential for ensuring both the employer and the employee are on the same page, and are in the best position possible to enter into an agreement. By keeping these best practices in mind, employers and employees can ensure that their contracts serve everyone involved.