Employers oftentimes have potential employees or independent contractors sign legal documents that dictate the nature of the employment. These legal documents are referred to as “Employment Agreements”.
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These agreements should thoroughly describe the nature of the position in order to avoid any confusion that may consequently lead to harm to the employer or worker. This article will highlight the important aspects of what each employment agreement should include.
The Nature of the Position
In order for an employee or independent contractor to accept a position, an employment agreement must first thoroughly describe the nature of the job. The agreement must describe exactly what is required from the individual accepting the position. By adequately describing the position, the employer will be able to measure the performance of the employee.
The Compensation
A well-written employment agreement should include what the potential employee or independent contractor is to be compensated for completing the job. The agreement should also list how the individual is to be compensated and whether any benefits or severance exist. This section is important in order to notify both parties of the expected pay and to avoid confusion.
The Company Policy
Many businesses have distinct policies that each employee must abide by. The employment agreement may include a requirement for the potential employee or independent contractor to become familiar with these policies. In the event that an employer would like to terminate the employment due to not following the company policy, it would be justified if the employee had the chance to become familiar with the policy.
The Recoupment of an Advance
Oftentimes, employers may advance workers with payment prior to the date the compensation is to be paid. An employment agreement may outline this process by getting the permission of the worker to recoup the advance through the withholding of future funds.
The Physical Exam and Health Requirement
Employers may require all workers to fit a certain standard of health before extending the position. For example, a company may require an employee to pass drug tests prior to hiring the individual.
The Resignation
An employment agreement may include a provision about the possible resignation of an employee. This section of the agreement will outline whether notice must be given, the duration of the notice, and whether any severance will be provided.
Confidentiality
A successful business will often include a provision in the agreement that outlines what information the company would like to keep confidential. This provision is extremely important in order to protect company secrets that may harm the business if the information falls in the wrong hands.
The Non-Compete & Non-Solicitation Clauses
A non-compete clause should be included in the employment agreement in order to protect the company from unfair competition. The non-compete clause is a clause that will prohibit the potential employee from engaging in business in the future in direct competition with the current employer. The law dictates that the non-compete must be reasonable in geographical area, time limit, and scope.
Likewise, a company may include a non-solicitation clause that prohibits individuals from soliciting potential clients and employees after the company has trained and furthered the employee’s knowledge and skills – this clause must also be reasonable.
The Return of Company Property
The employee will often have access to company materials and property. An employment agreement may outline the policy on how an individual must return company property after the term of employment ends.