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8 Clauses Your Employment Contract Should Include

Your new business is growing, so now it’s high time you hired a few extra staff members. As a new business owner, you’ve likely had little experience with the hiring process in the past. But now you need to hire, and you want to ensure you adopt good human resource practices. Here are a few things to include in your employment contract.

1. Job information

Some of the most important details that an employment contract should include are the job title and team with which the staff will work. Furthermore, it should include detailed information about performance evaluations and to which the department the new employee will report. Make your employment clause as detailed and comprehensive as possible.

2. Compensation

State the compensation and benefits available to new hire. This part should include the rate per hour or monthly/yearly salary, as well as information about raises or bonuses and the requirements to qualify. Furthermore, clearly state what the benefits package entails.

3. Time-Off Policy

You should also explain the time-off policy in clear, concise terms. How many vacation days are granted for the year? Remember there will also be requests for time off that will likely occur without prior notice. These include family emergencies and sick days. If your employee fails to report to work without notifying the management, do they have to work after hours and/or weekends to make up for lost hours? This part of the contract should address these concerns.

4. Confidentiality

This is by far one of the most important clauses of an employment contract that shouldn’t be missed. Including a confidentiality clause in an employment contract helps protect your company’s unique brand, proprietary information, trade secrets, and other sensitive information. Some companies have a separate contract for this known as a non-disclosure agreement. You can simply add this clause to your employee contract and include a space in the section where new hires can sign.

5. Tech Privacy Policy

Keep in mind that there are laws that protect employees’ workplace privacy. Indicate your strict adherence to the worker’s privacy by clearly stating your tech privacy policy. Clarify whether or not employees can use social media or any technology while at work, and discuss whether you’re monitoring activity. For instance, if you don’t want your employees to use their work computers for personal use, state it.

6. Termination

In your employment contract, you should state terms and conditions for termination. Make sure to include any notice requirements. In other words, it should contain what every employee should do prior to terminating the contract. Also, state if the notice should be in writing. Some workers might put an end to a job abruptly. With this contract, you can take legal action against the defaulting party.

7. Employment Period

The contract should clearly state if the employment is continuous and permanent or for a specific period of time. More so, it should indicate how long an employee should work to define the employer-employee relationship. Cite the number of hours the employees is expected to work. Also state if the job can be completed remotely. If the job requires that the new hire must work nights and weekends, explain when and how often.

8. Classification

For this clause, you need to check whether the new hire is an employee or a contractor to ensure tax and insurance compliance. Many companies have faced lawsuits because they failed in employee classification. There are distinct features that set an employee apart from a contractor. Make sure you classify employees correctly to ensure compliance.

While these are essential elements that you should include in an employment contract, there are many other clauses you can add to clearly state your company’s established rules, expectations, and objectives.

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