What to Include in an Employee Contract

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What to Include in an Employee Contract

As a startup business owner, you have a lot of firsts ahead of you, including your first hire. To protect yourself and your employees, you must know how to create a proper employment contract. Here are a few essential items to ensure you include on your agreement. 

Job Title 

So you and your employees remain on the same page, include the hire’s official job title and duties on the agreement. Sometimes, workers handle tasks they did not expect to fulfill, which can lead to bad blood, frustration and the potential loss of great talent.

Employee Classification

For taxes, make it plain whether a hire is a full- or part-time employee or an independent contractor. Sometimes, employers misclassify workers, which can lead them to not handle taxes properly, which can spell trouble for employers and employees/independent contractors alike. You may even find yourself on the receiving end of a lawsuit for misclassifying employees, which requires the experience of a trusted business law firm long island.

Benefit and Compensation

Note agreed-upon compensation and benefits on the contract, specifically if the employee receives an hourly wage or a yearly salary. Include whether you offer raises, bonuses or other supplementary forms of compensation. Detail how you handle employee benefits, and do not forget to note if you as an employer cover benefits costs.  

Termination Conditions and Terms

There may come a time when you or your employee wants to end your work agreement. Should that happen, you and your employee must know the necessity of severing your professional relationship. For instance, you may want to include an amount of notice requirement or note whether you prefer a written notice.

On a related note, do you want to offer employees a severance package if the two of you part ways? If so, include the terms of that package on the employee contract.

A properly formatted employee contract facilitates a healthy work environment. Keep the above insights in mind while drafting your first agreement.

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