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Employment Contract Templates

The employment contract is a staple of today’s professional world due to eligibility requirements and liability reasons. The employment contract should be drafted to protect both the company and employee ensuring both parties hold up their end of the deal. The type of contract that is drafted will depend on what type of job is being undertaken. Severe bodily harm is possible in some job roles while a remote job might not include this type of language.

The adoption of HR processes that will help fight any claims of false termination needs to be done. Far too many new businesses seem to think that all employees will love the company even if they leave. Startups can be fast-paced with quite a bit of employee turnover which could lead to a number of lawsuits if the termination was not handled correctly. The right contract will cover things like grounds for termination so there is nothing lost in translation.

The right hiring practices can allow a company to grow due to a good business plan and staff that is productive yet affordable. Artificial intelligence can help with hiring but the processes have to be created by the staff.

Below are just a few things that need to be included in an employment contract as well as the reasons they are important:

  • There should be no confusion about what job title a person is receiving an offer for. Mentioning which department someone will fall under or manage is also imperative. Performance and productivity for job success need to be outlined here. Misalignment of goals could lead to poor performance due to unclear communication.
  • Make it clear whether the person can be demoted or their workload increased immensely. A person isn’t going to leave their current job that is stable for a new job where they could be demoted after a few months.
  • Required travel can be a contentious issue for someone that didn’t think their job would require them to travel often. Salespeople might be sent weekly to see different prospects and to upsell current clients. Travel requirements need to be detailed as many people want a clear understanding of what their work-life balance is going to be.
  • The commission rate for a salesperson needs to be explicit as a capped commission might be a dealbreaker for a star sales professional. Compensation should be detailed along with the benefits associated with being a company employee. Trial periods before full-time pay might be outlined here.
  • Benefits should be detailed with how much the company covers or if there is a 401k company match plan. The right benefits can convince a person offered a job to accept. A company that offers more money but does not pay health insurance or offer stock options has far less income potential.
  • Work from home policies should be highlighted as this is a perk that could convince a great web developer or copywriter to join a team. Attracting a top professional from the freelance world to work remotely can save on salary while not sacrificing the quality of work.
  • Paid time off or PTO is important to many people that love to spend their time off from work traveling. PTO differs at certain companies as an employee might need manager approval to take the vacation time they have earned. This can be a huge issue especially during the holidays when a multitude of people put in time-off requests. Detail whether the number of days of PTO goes up after a certain period of time as this does occur at some places of business.
  • If you are hiring a contractor for 6 months there is going to be a far different contract in place than if you are hiring someone full-time. With contractors, there could be a clause that they simply will not have a need for their services with no notice. For a full-time employee, termination of this person will require just reasoning unless it is a part of a mass layoff.
  • Contractors should have a set amount of time that the contract is going on for detailed. For both regular employees and contractors, it is important to define when they should be working. The location where they should be working is important as well as remote workers/freelancers are commonly used for contract work.
  • NDAs are so much more common than in the past that it is amazing. These were only signed at tech companies due to innovations and trade secrets that could be leaked to a competitor. Non-compete clauses are common with companies not wanting a top employee going to a competitor in the same city. With this being said, a competitor does not want an employee willing to practice these unethical tactics as they could be the next victim.
  • The mobile phone policy needs to be stated explicitly as there is so much time theft on account of some staff members that are constantly wasting time at work. Keeping business devices for business use only will also help reduce malware that infects a company device due to personal searches.
  • Social media policies need to be instituted as the last thing you want to do is get fired for sharing a post you thought was funny that another person thought was offensive. When you list your place of employment on your profile, you are representing the company to a point. Negative talk about the job or company should also be detailed as it seems that many people do not have the common sense not to verbally thrash a coworker in a Facebook post or Instagram comment.
  • Required notice for leaving the position should be outlined but not everyone sticks to this. Most people will want a recommendation but others might have a superior job lined up.
  • Severance plans are quite appealing to many people as the company takes care of a former employee after termination. There is no law requiring this in the slightest but it can be a perk that many people think is a huge positive aspect when considering a job offer.
  • Policies on harassment and discrimination in the workplace. The process for this should also be outlined in the employee handbook. Bullying is more common in the workplace than most people think so make this a focus as well.
  • Grounds for termination is going to be important as a person should understand what is expected of them. This does not only cover job performance but also how they interact with coworkers. Ethics clauses should be included as a person constantly being arrested or incarcerated is not going to be consistently reliable.

What Potential Hires Might Think Of The Employment Contract

The employment contract could come attached with the job that is being offered. The following are what potential hires might think with certain aspects of the paperwork:

  • There are those people that care more about the money they will earn than the job and can do an incredible job. Not explicitly stating the compensation clearly or the bonus structure could be a red flag for them. Sales jobs are a great example as high-performing salespeople can make as much as some executives annually depending on a commission structure. A signing bonus for someone that left a great job is common so include this if necessary.
  • Leaving out PTO policies will impact those people that work so that they can travel a few times over the course of the year. Not clarifying whether the PTO number of days increases with time can be worrisome. A person that expects 20 days after 5 years will be quite upset if they only have 10 in year 5 due to their lack of reading the employment contract.
  • Lack of paperwork about NDAs might make a seasoned professional worried. A recent college graduate might take any job without so much as filling out a resume. Background checks are commonly done as well for safety reasons. Lack of a background check could make a person concerned with who they were working with.
  • The details of the job and goals being clear might lead to a person that bluffed their way through the interview process to decline the job offer. If you are looking and hiring for a top-performing sales professional, sales is not something that you will learn in a day or even a month. True sales experience can come in many forms including email, phone, face to face, in-store, or eCommerce.

The last thing that a successful startup or small business wants is a vindictive ex-employee suing the company and winning due to the wrong employment contract being written up. These contracts are important but so is the process of documenting poor performance, behavioral reprimands, and harassment accusations. Even the smallest of businesses should have a standard employee contract written up as employees no matter the size of the business have rights.

Write a different contract up for different positions as the compensation as well as responsibilities are going to change. Finding a template can be important as not all businesses have the budget to have a professional write all of their contracts as this could add up quickly.