How it works
Reviewed by Rocket Lawyer On Call Attorney Anjie Flowers, Esq
An Employment Contract is one of the most important documents your business can use. It allows you to solidify your relationship with your employees and make sure everyone agrees on salary, benefits, hours, and what's confidential information. It's a smart way to make sure everyone's on the same page.
Other names for an Employment Contract:
Employment Agreement, Employee Contract, Job Contract
Why use an Employment Contract
Once your new employee has filled out an Employment Application, submitted a resume, and aced their interviews, the last step you should take to make things official is to have them sign an Employment Contract. Obviously, a lot of what's in the contract will be hashed out before your new employee signs it—things like salary, benefits, and general job duties—but it's important to put all that in writing so both you and your new employee will know exactly what to expect.
What to include in your Employment Contract
An Employment Contract form should contain basic information about your company and your new employee, things like the name and address of both your business and your new employee.
Past those kind of rote details, you have plenty of other options though. Maybe the role is being filled with a specific purpose in mind, like unloading boxes in the stock room or running HR for your new startup. Maybe you're offering health insurance. Maybe your employee is being hired for a fixed duration. Whatever your situation, this Employment Agreement will work for you.
Here are some specific provisions you should consider including in your Employment Contract:
Wages: It's obviously important to memorialize how your employee gets paid. Typically, that means salary (a fixed sum, usually paid bi-weekly), wage (an hourly or daily amount), or commision (based on work output—this is common for sales people). You can also choose a combination of commision and wage or salary.
Confidentiality: While some employers choose to make a separate Non-Disclosure Agreement to protect their intellectual property, you can actually do that here in our Employment Agreement. Make sure you specify what sort of information needs to be kept confidential. We have a host of popular options (such as inventions, products, trade secrets, future plans, and even discounts), as well as the option for you to write your own. You should also note the consequences if your employee divulges this information.
Non-compete: Some companies choose to include non-compete clauses in their Employment Contract. If signed, that means that when your employee moves on with his or her career, they won't be legally allowed to work at a company that is one of your direct competitors. Usually, you'll want to note a period of time in the non-compete clause, such as one or two years.
Social Media: If you're planning on having your new employee handle your Facebook, Twitter, or any other social media accounts, you should note that in your Employment Contract. This is important because it will allow you to assert ownership over the likes, follows, and other work product that comes as a result of that social media work.
Benefits: Certainly, it's worth including what sorts of benefits you're offering your employee. This can be anything from the typical fare—stuff like health insurance or 401K matching—to special benefits, like free baseball tickets or performance-based vacation.
More than just a template, our step-by-step interview process makes it easy to create an Employment Contract.
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