An employment contract is between an employer and the employee being hired to perform a service in exchange for payment
An employment contract is between an employer and the employee being hired to perform a service in exchange for payment. An employee’s pay, benefits, and other terms of employment are negotiated between the parties during the hiring process.
Provisions and Clauses of an Employment Contract
An employment contract is made up of different stipulations. Upon signing the agreement — as long as the provisions and clauses are within the bounds of the law — the contract is effective. It’s important for both employers and employees to know what rules to which they’re bound during someone’s employment term.
Duties: The employee’s title and main duties bind the worker to carry out the duties within the contract. Adding clauses that suggest that the duties could change over time always pads a contract with flexibility.
Compensation: Compensation sets the starting wage that the employee will be paid and is typically categorized into salary, as well as how often the employee will be paid.
Termination: Some employment contracts are not longstanding, and some have an end date. Some renew yearly. The termination date of the contract would be listed in these cases.
Non-Compete: Employers have the option to include a non-compete clause for a set timeline, which would prevent workers from bringing trade secrets to competing organizations.
Benefits: Benefits like health insurance, PTO, sick leave, and any other extras that the company provides the employee in addition to their salary should be listed.
What is a non-compete clause in an Employment Contract?
A non-compete clause keeps an employee from working for an employer’s direct business competitors during their work relationship and after it has ended. Generally, non-compete clauses can only last for a specified amount of time. Additionally, non-compete clauses must meet specific requirements to be enforced, such as being limited to a reasonable geographic location.
What is a confidentiality clause in an Employment Contract?
A confidentiality clause keeps an employer’s confidential information private. Confidentiality clauses can prohibit current and former employees from discussing or misusing an employer’s secrets, marketing plans, and product information.
Confidentiality clauses protect employers from many different circumstances that could otherwise cause employers to lose business, employees, and trade secrets.
What is included in an Employment Contract?
When creating an Employment Contract, you can include the following terms:
- The type and rate of compensation
- The frequency of payment
- Vacation time
- Specified work hours
- Specified work location
- Employee responsibilities
- Confidentiality, or non-competition clauses
- Termination terms and more