You’re a business owner who recently hired a few job candidates and wonder if you should draft an employment contract for them to sign. An employment contract outlines the responsibilities and roles of company personnel.
Employment contracts typically include wage/salary information, work schedule and employment duration. While you’re not required to create a written contract, it’s advisable that you do this for the following reasons:
An employment contract can prevent an employee from working for competitors
Some employment contracts consist of a non-compete agreement, which forbids an employee from working for a competitor business for a certain amount of time after the employment period ends. This applies to both former and current employees.
Employment contracts can aid in retaining top-notch employees
Many people are familiar with the saying, “Good help is hard to find.” And once you hire an employee who shows up on time and does excellent work, you will want to do everything possible to keep them on board. You can encourage great employees to stay by offering attractive benefits packages and monetary bonuses.
An employment contract can create a win-win situation for everybody
Because employment contracts — or any type of contract — show tangible proof of rules and guidelines, they can protect both you and your employees. For example, if an employee has a complaint about their paycheck, they could point out a discrepancy between what the contract says and what they’re actually earning.
On the flip side, you’d have evidence of enforceable policies to ensure employee compliance and guard you against potential litigation.
Employment contracts lay out what’s expected from both employers and employees, plus make sure everyone’s on the same page. If you have any questions regarding the intricacies of an employment contract, consider seeking legal guidance.