You’ll have the potential employee sign if they agree to the terms of the possible new employee agreement you have discussed. Working fixed hours regularly will result in an employee being considered a permanent employee by the law. An employee can also become permanent if you treat them as a fixed-term employee without having any justification. Leverage our network of lawyers, request free bids, and find the right lawyer for the job.

This type of agreement lays out the terms and conditions under which you provide services and specifically spells out your responsibilities and liabilities. The employment contract should clearly state for how long the employer agrees to retain the employee. This is one of the most basic pieces of information that every employment contract should address. Here’s a guide to the different types of small business employment contracts — and where to go if you need help drafting them. Before drawing up contracts, take the time to read about the differences between the different types of employees or ask someone to explain them to you. Attorney Cory Barack specializes in business, real estate, probate, and energy law.

Top 10 Contracts for Every Small Business

In this article, I summarize 10 key contracts for small and growing businesses. These contracts need to be well thought out and well drafted and can be crucial to the success of a business. The contract can outline what the employee’s work schedule will look like. It can include details like what days and three-way matching hours they work, when they take breaks, how long their breaks are and what holidays they have off. While this is not strictly a contract, it is a change you, as an employer, must handle correctly to avoid legal issues. The law changed in 2021 in NC regarding how to handle changes or reductions in wages.

Moreover, your employees will be able to access their staff handbook from the same portal as their employment offer letter, employment contract and any other document you have created with them. An employment contract is a written employment agreement documenting the shared rights and responsibilities between your company and a W-2 employee. One aspect that makes employment contracts an attractive option for employees is the promise of severance pay. A severance package is additional compensation provided to an employee after the employment relationship has ended. It can include benefits such as extended life and health insurance coverage, stock options and employee retirement account funds. You are not obligated to offer severance pay to employees, but it can entice employees to commit to employee contracts.

The Right-To-Work States & Non-Compete Agreements

This allows both parties to have realistic expectations of when the employment will end. This type of employment contract is typically used when a business hires employees for a special project. A formal employment agreement is not technically necessary from a legal standpoint.

The information which needs to be exchanged to determine the fit is often confidential. In order to protect the confidential information and prevent the other party from using it or disclosing it, parties should enter into a non-disclosure agreement (NDA). Small businesses can create robust non-disclosure agreements using Legislate. To start, the small business will need to define the purpose for the disclosure of confidential information. The next step is to define the term of the agreement which is how long the information needs to be kept secret by the recipient. Finally, if both sides will be disclosing confidential information, the coverage of the NDA should be set to mutual, alternatively the NDA should be one-way.

Termination of Contract Employees

These documents can also protect your intellectual property and confidential information from unauthorized use by your competitors. From employment agreements to client contracts, our guide covers the contracts you’ll need to legally protect your business. By properly creating employment contracts for your small business, you can protect your company’s assets and ensure a successful future. With well-drafted employment agreements that meet North Carolina laws, you can confidently move forward knowing your business is legally protected. As a small business owner, you might feel that employment contracts are unnecessary, especially if you’re just working with a contractor or remote assistant.

• Copyright Rocket Lawyer Incorporated.Rocket Lawyer is an online legal technology company that makes the law simpler and more affordable for businesses, families and individuals.
• Consider consulting with an employment law attorney who can help you create airtight legal documents tailored to your business’s needs.
• Here’s a guide to the different types of small business employment contracts — and where to go if you need help drafting them.
• Employee compensation details can include the employee wage amount, whether the employee is hourly or salaried, what their bonus structure looks like and equity options.

Get legal advice if you are unsure because these laws are often complex. An employer may want to provide their employees with a certain level of security. They could draft an employment contract that limits the employee’s termination to only “for cause” situations. This type of agreement should be carefully drafted by a lawyer, as it limits the at-will relationship. To protect the confidentiality of your business, you can include clauses in your contract similar to the ones provided in our employee agreement templates. Another option is to attach separate documents that cover these two issues.

Good Company » Ask the Board

Gusto is an example of payroll software that offers features like e-signature and document storage as part of their payroll processing. Once you hire a worker, whether a 1099 contractor or W-2 employee, Gusto can process their payroll and store their signed contract documents online. It legally obligates you as the employer to do certain things and to provide the stated salary and benefits. If you want to change these later, then you will have to renegotiate the employment agreement. An employment contract can be useful because it clearly states all the requirements of the job and all the obligations the employer is entering into.

Another form of employee compensation that a written employment agreement should outline is employee benefits. You are legally required to provide employee benefits like family and medical leave, health insurance (if you have 50 or more full-time employees), unemployment insurance and workers’ compensation insurance. Contracts also clarify individual jobs by spelling out
employees’ responsibilities, compensation, bonuses, stock options,
rights to any inventions and patents, expense accounts and more. You can include an “evergreen” clause stating that the contract
automatically renews on a given day each year if neither side
provides notice of termination.

Probationary periods are often structured to allow an employer to terminate an employee for any reason, without needing to provide compensation or reasonable notice, during the probationary period. If you could create your own fantasy Board of Directors who would be on it? CO— connects you with thought leaders from across the business spectrum and asks them to help solve your biggest business challenges. In this edition, we ask an expert what you need to include in employment contracts and agreements.