Small Business Series #3: Employee Agreement Contracts

            As your business infrastructure grows, you will face the same question asked by so many other business owners: Is my business financially and logistically ready to hire employees? While you address this question, identify the key reasons you need employees, and lay a positive foundation for adding employees to your business organization.

            Your business should be prepared to hire employees by building employment contracts into your list of legal necessities. An employee contract serves to protect both your business, and the employee. The agreement also serves as the foundational building brick that clearly establishes the employee rights and responsibilities, as well as your obligations as the business owner. A well written employee contract clarifies the expectations of both parties to the contract.  

A Good Employee Contract Should Include The Basics

  • Wages – salary agreement, pay dates, and commission terms
  • Bonuses – whether they are discretionary or contingent
  • Other Benefits – vacation days, holidays, health insurance, other benefits unique to your business.
  • Termination basis – these terms should be addressed based on the state in which your business is located.
  • Best Efforts Clause – the employee commits to providing their best efforts at work.

An Excellent Employee Contract Will Include The Essentials

Ideally, your business employment contract will cover the following legal topics as well to ensure employer and employee understand the priority to protect work product, and confidentiality expectations.

  • Intellectual Property Protection
  • Non-Compete Agreement
  • Confidentiality Protection of business knowledge
  • Choice of Governing Law
  • Dispute Resolution Agreement

Creating the right employee agreement for your business can be complex depending on the type of business you operate. Consulting a small business law firm can provide you with the information you need to provide a legal framework for your company as it grows. Call Behrends Legal today for a consultation!

Phone: 970-578-9455


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