We cross the t's and dot the i's to ensure your employment contracts are structured to protect all parties.
An employment contract or agreement is used upon hiring an employee and it usually states the compensation the employee will receive, as well as other terms and conditions of employment that may exist.
Normally, an employment contract must contain principles and terms of following areas:
- There must be an offer of employment
- An employee must accept this offer
- There should be consideration for each party for the other
- The terms of the employment contract must be certain and precise.
Some basic terms of an employment contract would be:
- Job title
- Job description
- Remuneration
- Benefits
- Vacation policy
- Implied duties
- Termination policies
Duties and Responsibilities
An employment contract should clearly spell out the employee’s duties and responsibilities. However, employers can make any changes that are allowed by the contract to this section.
That is to say, that the employer is entitled to make changes to the extent that is agreed upon by both parties when they enter into the contract. Therefore, employees should reserve the right to make changes to the job title and job description in the employment contract.
Remuneration
Remuneration section should state the employee’s salary or hourly wage, along with the frequency of payments.
Unless stipulated otherwise, it is usually implied that salaried employees are entitled to have additional remuneration for overtime.
As such, employers will sometimes include an additional statement such as “additional hours may be requested or necessary from time to time”.
Benefits
Employees’ benefits can include:
- Medical and dental benefits
- Long term disability insurance
- Life insurance.
In the event where the employer wishes to make the policy part of the employment contract, the contract should attach those policies as a schedule, and the employee should receive a copy of the contract acknowledging his/her receipt in a written format.
Vacation
In the light of vacation policy, an employment contract should state the amount of vacation time employees are entitled to.
Employees should also reserve the rights to determine dates on which they take vacations.
Implied Duties
There are usually some implied duties required by law, which the employment contract may not necessarily cover.
These duties can be:
- Faithfully serving the employer
- Not revealing confidential information
- Not disclosing important information to the employer.
It is important for employees to understand those implied rules or terms, because they help employees avoid conducting harmful behavior to the employer.
In conclusion, a carefully-drafted employment contract not only helps employers protect its interest and reduce the risk, but also enables employees to protect their rights and clarify their duties and responsibilities owing to the employer.
Employers should think through when drafting an employment contract and include some basic terms in the paper.
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