An employment contract contains mutually beneficial elements
More detailed than a basic employment agreement, an employment contract should clearly state employee benefits and employer expectations.
If written correctly with clarity and focus, the contract should serve the interests of both parties well. Here are five elements to include.
1. Job requirements
Define the prospective employee’s position, setting forth all expected duties. Include the physical address where the employee works, as well as the expected days and hours of employment.
2. Performance expectations
List the skills the job requires, and set goals. Explain how the company recognizes outstanding work. For example, if the position is in sales, you can include expectations as to sales volume and new client recruitment. A reward for reaching a company sales goal may be inclusion in a special event, such as a President’s Club trip.
Explain the method of payment: hourly rate, salary or commission. Include the related figures in the contract. If there is a commission, spell out the percentage.
4. Company benefits
To many new employees, company benefits are just as important as the rate of pay. In addition to stating the company policy regarding holidays and vacation time, describe the benefits package the new hire can expect, such as company healthcare and retirement plans. Also, explain how much employees must pay toward any plan or membership, if applicable.
The employment contract must also contain a section covering both with and without cause termination. Explain what each means and the severance terms that apply.
Because the employment contract protects the employer and provides a new employee with the proper framework for his or her new position, the document must be carefully drafted in clear, plain language to avoid misunderstandings about the contents. Your company may be about to hire its first employees, or you may wish to revise your existing employment agreement. Explore your legal options to ensure the employment contract you need benefits your business and your prospective new hire.