An employment contract is the document used by businesses to provide the specific terms and limitations of their relationship with its employees.
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It is of utmost important for an employment contract to be made in every employment transaction or agreement to ensure that the rights and responsibilities of both the employer and the employee will be known by one another.
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Creating an employment contract will require you to be specific with all the details that you will write as the information within this document must be honored and executed once the signature of all parties have already been affixed. You can refer to the templates of employment contracts that we have listed in this post so you can have guides in formatting the actual contract that you will use and provide your employees with.
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Purposes of Making an Employment Contract
Even if there are different formats that are followed by companies when making an employment contract, the purposes of having this document are mostly the same. No matter what industry you are in, businesses will always have particular reasons for the development of an employment contract. Some of these reasons or purposes are as follows:
- An employment contract can define the legalities of the employment agreement between the employer and the employee. This promotes the understanding of the responsibilities of each party to one another while protecting their rights within the employment. It is essential for all parties to feel secured during the implementation of the transaction. If there is a legal document that bonds the employer and the employee, then it will be easier for them to trust one another.
- An employment contract can clarify all the inquiries and questions of the new hire about the employment. Contract examples in Word and other software that are used for the clarification and specification of employment terms can help maintain the professionalism and formality when explaining the bounds of the employer and the employee’s relationship. This document can serve as a reference in which the employee can browse through if he or she wants to be more familiar with the regulations that he or she has been subjected into.
- An employment contract protects the intentions of both parties. There are possibilities of legal cases and disputes arising in the future no matter how we trust the entities that we transact with. In these instances, an employment contract can be used as an evidence of the terms that the employer and the employee has agreed with. This is also one of the reasons why both the employer and the employee should have copies of original and signed employment contracts. You may also see contract examples.
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Things to Look Into When Developing Your Business’ Employment Contract
Contract examples in PDF, Word and Excel do not always provide the same results both for the business and the employees. There are several factors and elements that can affect the effectiveness and usability of an employment contract. This roots out from the development of the actual document and the implementation of proper guidelines on how the contract can be used by all entities within the employment agreement. Hence, it is important for the people who will be tasked to create and use the document to look into these matters:
- Refer to the rules and regulations of the business in relation to employment before making a contract. It is important for the full understanding of these regulations to occur so that all the items that will be included in the employment contract is sure to be realistic and attainable. Misleading and false information can cause the contract to be terminated and can further ruin the relationship of the employer and the employer. Ensure that you will avoid this instance from happening by being knowledgeable of the measures that you need to consider when placing the content of the employment contract together. You may also see key differences between agreements and contracts.
- Make sure that the employment contract will contain the signatures of both the employer and the employee. These signatures can entail the simple agreement of both parties which can make the contract fully enforceable. It is essential for the contract to first be signed before the employee is immersed in the operations of the business or any processes related to actual employment.
- Remember that making an employment contract is always important to be a part of your recruitment checklist. Whenever you plan to hire an individual, you have to ensure that the terms and conditions of the employment will be laid out accordingly. This can specify the expected deliverable that the employee should provide as well as the responsibilities of the business especially in terms of providing the promised and agreed upon salary for the employee. You may also like key differences between unilateral and bilateral contracts.
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How to Come Up With an Impressive and Highly-Usable Employment Contract
Being aware of the basics of agreement samples and employment contract development can help you have an easier, faster and more-efficient time in making this document. Once you are already confident with what you know about employment contracts, you can already start the processes of making it. However, we still suggest you to seek for the advice and guidance of lawyers and other legal entities so you can ensure the effectiveness of the employment contract that you will come up with. Here are some guidelines and suggestions that can help you create an impressive and highly-usable employment contract:
- Make sure that you are well-prepared before writing the employment contract. You may refer to the contracts used by the businesses within the same industry where your business belongs. This will help you gather more information on what you should include in your business’ own employment contract. You may also see catering contract examples.
- Review the job description of the work position where the employment contract will be used. It is important for you to be consistent with the items that you have provided in your job advertisement. Before writing the employment contract, you have to ensure that all the information in the job advertisement tools will be seen by the employee in the document that you will create. You may also like examples of writing a wedding planner contract.
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Steps in Creating an Effective and Comprehensive Employment Contract
The presence of a written employment contract can legally replace the agreements that have occurred between the employer and the employee verbally. A written employment contract serves as a stronger evidence in court trials when compared to verbal agreements which may not have any proof of existence. With this, companies should make sure that they will have a written contract in every employment opportunity that they will provide to qualified candidates. Here are the steps that you can follow in making an employment contract:
- Start with the title of the document. Ensure that there will be a heading that can specify what the document is and what it is all about. Simple terms like “agreement of employment” or “employment contract” will do. You may also see videography contract examples in pdf.
- It is very important for you to specify the accurate information about the parties involved in the employment. Properly spell out the name of the employer and the employee.
- Include basic information of both the employer and the employee which are essential to be known within the employment. These include the business location of the company, the contact information of the employee, and other details that can be used either for documentation, background check and other employment processes. You may also like the truth behind service contract checklists.
- Identify the terms of the employment contract. Be specific when it comes to the benefit that the business can provide to the employee. Moreover, the considerations of the provision of these benefits must also be considered. In exchange, the expectations of the business with regards the deliverable of the employee must also be set in the employment contract accordingly. You may also check out examples of employment contract templates.
- State the validity of the employment contract. You have to be particular with the dates that you will include in the contract. List down other important dates like the actual start of the employment.
- Guide the employee in terms of what is expected from him or her. Fully describe the work position that will be given to him or her. More so, explain the designation of the job position and the activities where it is expected for the employee to be involved in. Doing this can help the new hire easily adjust and adapt with the new work position. You might be interested in what is a business agreement?
- Lay down the details of the compensation, benefits, bonuses, and other privileges. You can also be particular when listing down terms on how employees can get incentives and the ways on how the compensation will be given. It is important for the salary and compensation computation to be included in this document for misunderstandings to be lessened or even be eliminated.
- Specify details on how the employee will be evaluated during the employment. Performance evaluation and appraisal should already be discussed even before the employment starts so that the employees can already prepare. However, take note that these details should only be given to the employee once an appointment letter has already been accepted and signed. You may also see sales agreement samples.
- Discuss the rules, and policies that the employee should follow. Do not go into precise details as you also have a handbook that the employees can review. A brief description of these items can help the employee understand more information about the regulations of the business.
- Include a list of the activities that can result to termination. This way, an employee can already be aware of the things that he or she should not do within the work environment. You can also list down the possible consequences of misconduct and misbehavior. You may also like commercial agreement examples & samples.
- Come up with non-compete clauses so you can protect the business from employees who applied to the company just to get relevant information about its operations. This can also back the business up during legal cases where private and confidential information are handed by the employee to other companies or business entities.
- Do not forget a signature line. Always let the employer and the employee sign the document. More so, specify the date when the contract has been signed by both parties.
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Useful Tips That Can Help You Make an Employment Contract That Works
Not knowing anything about employment contract development should not set you back as there are already ways on how you can effectively make this document. Listed below are a few tips that you can find helpful in making the employment contract that your business will use:
- Know which template or any formatting tool will work best for your employment contract. Aside from the details of the document, how you will present them can also affect the perception and impression of the employees about the agreement. Make the format of the document as formal and as business-appropriate as possible. Use the letterhead of the company so that the brand of the business can be associated with the employment contract that you will create. This can make the document truly the business’ own. You may also see management agreement examples & samples.
- Be aware of all the information that you will include in the employment contract. It is important for you to protect the resources, rights, and properties of the company. If a non-disclosure agreement is necessary to be made, then prioritize its creation and development as well. You may also like business agreement examples.
- Make sure that the details of in the employment contract are correct and updated. All the spelling, specifications, and other elements in the employment contract must be rechecked and reviewed to ensure its accuracy. Refer to the employee information form answered by the employee when necessary.
Use references when developing your employment contract. You can make the most out of the downloadable templates available in this post. Having references like templates and examples will allow you to have an easier and faster time to develop an employment contract without sacrificing its content, discussion flow and layout quality.