Additionally, Alex will have access to the company’s 401(k) plan with a 4% match, and will accrue 15 days of paid vacation per year. Compensation Alex will receive an annual salary of $90,000, paid in bi-weekly installments. Alex will also be eligible for an annual performance bonus up to 10% of the base salary, based on performance metrics. Term of Employment Alex’s employment will begin on September 1, 2024, and will continue until terminated by either party according to the terms outlined in the contract. Outlines a relationship between a staffing agency and a company to recruit and staff. Use it to protect a company’s competitive advantage by restricting an employee or former employee from working for a competitor.

• Using an employment contract can go a long way toward eliminating confusion from the start; however, it can also create more work for you and is sometimes costly.
• Essential to these Web sites is a Terms of Use Agreement, which is intended to be a contract between the Web site owner and the users of the site and any purchasers of goods or services from the site.
• Additionally, collaborate with legal or HR consultants to confirm you’re following up-to-date laws regarding exemptions, overtime eligibility, and benefits requirements.
• Both the employer and the employee’s signatures are required for the employment agreement to be valid.
• Consider your people’s needs and your workload to determine whether or not your small business can operate effectively without a dedicated HR team.

Pros & Cons of Using an Employment Contract

• As you can see, employment contracts are worth the effort — even for small business owners.
• You’ll want to ensure that both you and the employee sign any legally required contracts to prevent undue liability.
• A) Choose this if the employer can terminate the employment without cause.
• Ensure clauses that protect company secrets and prevent the employee from joining competitors immediately after leaving are included.

The primary categories are included in the template, but you could add others, like relocation assistance if you offer it. Every business owner knows that the “riches are in employee contracts for small business the niches”—aka, you want people who are experts in what they do, even if that expertise is narrow. In fact, sometimes, the narrower the better, as people can really focus on the one task they’ve been handed. Businesses are seeking specialized skills that really cater to their specific needs.

Duration of employment

Once you and the candidate have discussed the terms, you can present the employment contract. When the contract is signed, you may want a notary public present for top-level positions. You need to know the person behind the application and whether they will fit your company well.

Signatures

For example, a retail shop employee might spend an hour assisting customers on the floor, an hour at the till, and an hour taking inventory and organizing the back end. We’ll break down exactly what employment contracts are, as well as how they can work in your small business’s favor, even if you feel like your time is limited and your plate is already full. Before finalizing, have the contract reviewed by legal professionals to ensure compliance with labor laws. They don’t have set regular hours but are called upon when there’s a demand. An employment contract can be amended, but a new one needs to be drawn up. D) Choose this option if the employee can terminate this employment agreement anytime and for any reason.

VantagePoint Capital Partners, a large venture capital fund in the San Francisco area. My focus as a venture capitalist is on investing in Internet and Digital Media companies. I am also the founder or co-founder of several Internet companies, having sold them to NBC Interactive, LexisNexis and D&B. I am the co-author of Poker for Dummies and a Wall Street Journal bestselling book on small businesses. I was virtual accountant also a corporate partner at the law firm of Orrick, Herrington & Sutcliffe, with experience in startups, mergers and acquisitions, strategic alliances, and venture capital.

Consider consulting with an employment law attorney who can help you create airtight legal documents tailored to your business’s needs. Employee contracts are a type of business deal that prevents legal liability from falling on a small business owner. You’ll want to ensure that both you and the employee sign any legally required contracts to prevent undue liability. Let’s delve into the different types of employment contracts, offering insights into their unique characteristics and applications. Legal Templates LLC is not a lawyer, or a law firm and does not engage in the practice of law. Legal Templates cannot and does not provide legal advice or legal representation.

Classify team members correctly

Before determining if employment contracts are right for your business, it is essential to know what type of details they include, how they differ from at-will employment, and their advantages and disadvantages. As a small business owner, you might feel that employment contracts are unnecessary, especially if you’re just working with a contractor or remote assistant. However, there are certain legal responsibilities beyond payroll taxes that come along when you hire someone (albeit for a short period of time) to help you.

More clarity surrounding job expectations and responsibilities

It also lets them know they are being treated the same way as other employees—that every employee is subject to the same policies. Use this Termination Letter when terminating employment for an employee of your company. A letter of reprimand is an official document that is given to employees to stop undesirable behavior in the workspace. It is also known as a warning letter, Online Accounting that effectively communicates to an employee that they should improve their actions at work. Employees must adhere to the rules and regulations in this sample computer use policy.

Agency workers usually work on a temporary basis, and the length of their contract will depend on your needs as an employer, as well as their availability. However, part-time workers generally also hold permanent positions and their contracts contain many of the same details as their full-time counterparts. The number of hours they’re scheduled to work per week should be clearly visible within the contract, but they may have the option to work overtime, if and when desired.