What an Employee Contract Must Include and How to Achieve It

As an employer who does not have experience drafting an employee contract, it can be challenging to nail the finer points. In most cases, small companies start by recruiting friends and family members.

This practice does not compel employers to draft a legally abiding contract. However, this can change when the company grows and starts hiring unknown candidates.

To hire smart, you need to adopt solid HR practices. One of the things you will need to adopt is a good employment contract.

It can feel not very comforting to draft an employment contract.

However, if overwhelmed, you can have attorneys who only practice in employment law put together an employment contract for you. This article focuses on what an employment contract must include and how to achieve it.

What to Include in an Employment Contract

If you are drafting your first employment contract or updating an existing one, here are basic items that every contract should include.

Job Description

As an employer, you should ensure your employment contract clearly indicates the roles and duties of the employee. If creating a brand-new position, define the role requirements and scope of the new role.

This helps the employee have a clear understanding of the work.

Some of the key pieces of information you need to include in your employment contract to make it clear are:

• Job title
• Role requirements
• Skill requirement
• Education requirement

Parties Information

An employment contract should identify the parties involved. The basic information such as names, national identification numbers and addresses of both the employer and employee should be clearly outlined in the contract.

Terms of Employment

The employment contract should outline the type of employment (full-time, part-time or casual), the starting date, the expected working hours and how long the contract is abiding.

Compensation and Employee Benefits

One of the crucial factors to include in an employment contract is compensation and benefits package. The contract should outline clearly and directly how the employee will be compensated – hourly/weekly/monthly or commission and include any relevant overtime, bonuses and allowances.

Compensation should correspond to the employees’ experience level, position, academic qualification and work done. Other details to include in the contract are:

• Holiday pay
• Health Insurance
• Raises, bonuses, incentive opportunities
• Retirement plan contributions
• Paid time off
• Method of payment

Employment Absence

It is pretty unlikely you will report to work every working day for the entirety of your employment period. Therefore, an employment contract should include specific guidelines about employee absence such as time off, sick days and vacation time (and what happens with unused time off).

Time off and vacation are the most sought-after benefits after healthcare and insurance. Therefore, you should set a section in the contract to discuss these details.

Dispute Resolution

A dispute resolution clause is a must-have in an employment contract. The clause specifies the course of action to be taken in case of a conflict between the employer and employee.

Confidentiality and Privacy Terms

Every business has trade secrets it needs to keep private to protect itself from the outside world. Employees are therefore required to maintain total or partial confidentiality on the company’s practices.

To protect the company, an employment contract should have a non-disclosure agreement that prohibits an employee from revealing valuable or sensitive information about the company.

Termination, Severance and Survival

An employment contract should also outline all the possible grounds that can lead to termination. The contract should also include a notice period for termination, restrictions an employee must adhere to before leaving your organisation, a severance or survival package for employees who have been laid off and under which circumstances it can only be offered.

Conclusion

You can have an employment lawyer draft an excellent and clear employment contract for you or use digital templates from the internet.

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