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Bringing employees into your company? Have an employment contract

You may have been one of the many Colorado entrepreneurs who started your company in your home. Perhaps you handled all the necessary tasks alone or with one other person until your business got off the ground. Fortunately, your company saw success to a point where you knew you needed to find a commercial space from which to operate and to bring in outside help.

Outside help typically comes in the form of employees who business owners hire to carry out various tasks. If you have reached a point where you need to hire employees, you may feel excited. After all, this step means that your company has grown to a point where you cannot handle everything alone. However, it is important that you do not overlook the legal implications of bringing in hired workers.

Have an employment contract

Even if you need a couple of employees at the start, it is still important that you have a legal contract in place pertaining to their employment. This early contract could serve as a template for an updated contract in the future when you bring on additional employees and likely find yourself having to comply with various employment laws that apply to larger companies. Your contract would benefit from having information about the following topics:

  • How much your employee will earn and whether compensation will be hourly or salaried
  • The length of time you intend to maintain employment, whether on an ongoing basis or temporarily with the start and end dates of employment included in the contract
  • The schedule you expect the employee to keep, including days and hours to work
  • Any benefits you intend to provide the worker
  • The tasks and responsibilities the worker will handle after obtaining employment
  • Confidentiality terms
  • Non-compete clause

In regard to confidentiality and non-competition, it is typically best to have separate documents to address those matters. These standalone documents can go into more detail in terms of what information should remain confidential and the scope of any restrictions on future employment with possible competitors.

Start protection early

Even as a small business, protection is important. You certainly do not want a disgruntled employee to derail your business due to a lack of understanding regarding employment expectations. Your business may need specific terms to address unique aspects of your company, so you may want to ensure that you have information in your contracts that directly applies to your operations. These contracts should be legally binding and worded to protect you and your company's best interests.

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Brady, McFarland & Lord, LLC
5400 Ward Road, Building 5-170
Arvada, CO 80002

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Phone: 303-835-1811
Fax: 303-424-2599
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