An employment contract form is an effective tool used by an employer to draft an employment agreement with a newly hired employee. Both the employer and employee can refer to the contract in case there is any violation of terms of the employment.
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What is an employment contract?
An employment contract is an agreement between the employer and the newly hired employee. This agreement outlines responsibilities, compensation, benefits, and other employment terms that are agreed between them during hiring process. It is basically a legally binding agreement between the employer and the employee. Some other names of the employment contract are;
- Employment Agreement
- Work Contract
- Job Contract
- Contract of Employment
- Contract of Service
What are the different types of employment contracts?
There are several types of employment contracts so you should select one that best suits your business. The selected contract must indicate the most favorable arrangements that you will have with your employees. Let us discuss below the most popular types of employment contracts;
Permanent employment contracts
This type of employment contract are for the employees who will work full-time or part-time on daily basis. They get a salary or hourly rate and continue their job until employer terminates them.
Temporary or fixed-term employment contracts
This type of employment contract is for the employees that are employed for a particular period of time. Also, they work part-time or full-time. They are temporarily employed having no fixed date. Furthermore, they may be terminated on a notice.
Executive employment contract
The executive employment agreement is between highly compensated executive and an employer. It highlights the contractual responsibilities and expectations between parties. Both parties should be agreed on the terms of the contract in order to make it legally effective.
Which provisional clauses should be included in the agreement?
Here are the provisional clauses that gives protection to the company. Also, the employees and the employer must know the rules to which they are bound;
Compensation sets the starting wage paid per hour, week, or month. It also includes overtime, bonuses, and the compensation schedule
The contract clearly states that how the employment relationships will be ended as most contracts are not long-lasting, they might have an end date or renew yearly.
According to this clause, employee isn’t allowed to work for competing companies or competing with the employer in case they leave the company. Including this clause would prevent workers from misusing confidential information. The employees might not be able to work in similar industries due to this clause.
This is also referred as trial-period. Employee is basically on trial while this period. It’s up to employer either terminate or retain the employee during or after this period.
When probation period of an employee ends and if it is retained then other benefits are included to their salary that should be listed in the agreement. These benefits may include the health insurance, vacation, sick days, paid time off (PTO), maternity leave, etc.
As per this clause, when employees leaving the company, they aren’t asked other employees to join them. Furthermore, this is against the agreement to ask the clients or customers of a company to follow them to their new company.
Above all, there must be a reimbursement provision in the employment contract form. It states that the company will provide the employee job relevant expenses such as business travel, or relocation. You should also clearly mention in the contract that before quitting, employee has to provide a specific notice to the employer. This way, it becomes convenient for the company to hire or train their replacements.
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In conclusion, an employment contract form clearly outlines the expectations and job responsibilities of the employee. If employee violates the terms of the agreement then employer has right to fire them. Thus, this document protects both the employee and the employer in case a dispute arises.