Important Considerations When Drafting an Employee Contract

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While owning a business, contracts are a very important part of ensuring that your business runs smoothly. In order to avoid complicated lawsuits and other legal troubles, drafting an employee contract is crucial when you find someone perfect to work for you. Before making a new employee contract, you should consider a few things to include.

Why Should I Draft an Employee Contract?

First, it’s important to understand the many advantages of writing an employment contract, and it can benefit both the employer and employee. Employee contracts will help keep the employee at the company. Most contracts will specify a minimum length of time the employee has to commit to working, which can also give the employer enough time to find an appropriate replacement. Contracts also help to protect the confidential information of a new employee. They can also set performance standards and provide security for the employee.

What Should I Include in an Employee Contract?

In an employee contract, you should include:

  • Job responsibilities
  • Pay
  • Benefits
  • Time off and vacation time
  • Commissions and bonuses
  • Stock options/profit sharing
  • Travel expenses
  • Company equipment rules
  • Disciplinary action and termination processes

It is crucial that you include these items in your employment contract in order to avoid employment law litigation in the future. In legally binding agreements, anything that is written on paper must be applied in the appropriate situation, so keep in mind how this could limit flexibility in your business. For more information on business contracts and how to legally draft them, contact a business attorney at Garland & Mason, LLC today for your free consultation.



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