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What to include in your business’s employment contracts

On Behalf of | Jun 7, 2023 | Business Law

Employment contracts play a crucial role in the relationship between employer and employee. They establish expectations and responsibilities for both parties and can help prevent misunderstandings and disputes.

Find out more about the information that businesses should always include in their employment contracts.

Job description and duties

The employment contract needs to clearly and concisely describe the job and the duties that the employee will perform. This information provides clarity and sets expectations for both the employer and the employee. This clause should be specific and include details about the employee’s position, responsibilities and reporting structure.

Specify compensation and benefits

Compensation and benefits are key components of an employment contract. The contract should list the employee’s salary, pay structure and any bonus or commission plans. Additionally, it should discuss the employee’s benefits package, such as health insurance, retirement plans and vacation and sick leave policies. It is crucial to ensure that the contract complies with all relevant state and federal labor laws.

Outline termination and severance

Employment contracts should provide specifics about termination and severance policies. The contract should spell out the conditions under which termination may occur and any notice requirements that either party must meet. This helps ensure that the termination process is transparent and fair.

Include confidentiality and non-compete clauses

Confidentiality clauses prohibit employees from disclosing confidential or proprietary information about the business, its clients or its operations. Non-compete clauses prevent employees from working for competitors or starting competing businesses for a specified period after leaving their current position. It is important to ensure that these clauses are reasonable and comply with all applicable laws.

Consulting with an experienced employment attorney can help businesses ensure that their employment contracts are comprehensive, legally compliant and fair to both parties.


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