Essential Details About Employment Agreements

An employment contract outlines the terms of employment when a company brings on a new hire. Doing your employment contract right will keep you from having disagreements with new hires or established employees if problems arise. These tips will help you find an employment contract template and customize it effectively for your needs.

The details we will cover below include:

• Basic Features of an Employment Contract Template
• Clauses to Put in an Employment Contract
• Additions to Consider for an Employment
• Mistakes to Avoid
• Additional Resources
• Collecting Employment Contract Signatures

When customizing an employment contract template, makes sure it contains each of these important pieces of information:

• Job details
• Compensation and benefits
• Personal and sick day policies
• Type of employee
• Schedule
• Termination terms and conditions

Each employment contract will be unique to a business's structure, but some contracts are universally needed. These include:

• Confidentiality agreement – If your employees will be able to see confident and sensitive inside information, make sure there is a confidentiality agreement in the contract. This will prevent them from sharing sensitive information with third parties.
• Severance clause – This clause indicates what the employer and employee’s responsibilities are should you decide to terminate the employment contract. It includes any compensation paid to the employee should they be terminated by the employer.
• Termination clause – Use this clause to clearly state the terms of termination. Include any actions the employee could take that would lead to immediate termination.
• Compensation clause – In the compensation clause, clearly state when salaries can increase or decrease, what type of bonuses are guaranteed or possible, and how and when the employee will receive payment.
• Benefits clause – Detail all the exponential benefits an employee receives from your company, including insurance, vacation time, retirement benefits, stock options, financial counseling, and other perks you include.
• Liability coverage clause – Add details about any liability protection the company has that applies to employees, as well as any liability coverage the employees must purchase for themselves.
• Disability and death clause – Outline in the contract what happens if the employee is disabled or dies while still under the contract.

Because each business is unique, your employment contract will not look the same as another business’s. Consider the way your employees interact with your company and consider adding:

• Reimbursements – Do you plan to reimburse employees for tool purchases, car use, moving expenses, or business expenses? Outline the terms in the contract, and include details about the time frame this reimbursement is available.
• Equity grants – If you plan to offer equity grants, outline the terms, including what percentage the employee receives and what happens if the employee is terminated.
• Technology confidentiality – Are there things you need to avoid sending electronically? Add this to the employment contract, or add a clause that discusses secure options, like Nitro Sign for sending documents for signatures.
• Remote work arrangements – If you allow your employees to work remotely, consider how you will structure this and what safeguards you need, and add that information to your contract.

When personalizing an employee contract template, don’t fall victim to any of these mistakes:

• Don’t be unwilling to negotiate with new hires, especially if they are a good candidate.
• Never agree to terms that are not included in the written contract.
• Don’t forget to have part-time employees sign an employment contract.
• Don’t overlook the importance of signatures and secure signature collection. Use Nitro Sign to get any of your contracts or important documents signed

Check out these resources that can help you craft a better employment contract:

• Forbes: Negotiating Employment Agreements: Checklist of 14 Key Issues
• How to Write an Employment Contract
• US Chamber of Commerce: How Do I Write an Employment Contract when Hiring a First Employee?

The final step in finalizing your employment contract is getting a signature from the hiring manager and new hire. With many employees working remotely, you may not be able to collect your employment contract signatures in person. Nitro Sign makes it easy to send important documents and collect signatures securely. Sign up for your trial today.