From scanning countless sample applications to interview after interview, now, you have just hired someone new as an addition to your company’s workforce. You want to make sure that your new hire understands the policies as well as the duties and responsibilities expected of him/her. You want the employment and the company operations to go as smooth as possible with minimal bumps along the way. You can definitely do this through an employment agreement.
Sometimes, you will get confused if you should or should not give a written or printed employment agreement. We would like to give you peace of mind regarding that confusion plus give you a whole lot of useful tips and guidelines regarding these types of document.
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We even uploaded a few sample agreements in PDF and sample agreements in Word to make it even easier for you to figure out what these look like. These samples are easy to download and use as reference to ensure that you are well on your way to coming up with an effective employment agreement.
Now, if you are ready to find out more about employment agreements and how to come up with one, just keep on reading this article.
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What Is an Employment Agreement?
A standard employment agreement is a contract of service that includes the employee’s duties and responsibilities in the company and what are the terms and conditions that he/she needs to follow in order to have a long-term employment with the company. To make matters simpler, it is basically a document that an employer and employee both sign to signify that there was an understanding between the two parties with regard to an employment.
This document is usually handed to a newly hired employee in order to establish early on what is expected of him/her. This is a legally binding document as it contains the signature of both parties. Two copies are made: one for the company and one for the new hire. An employment agreement can be a means of protection between the two parties should any conflict or dispute arises during the employment.
What Is Covered by an Employment Agreement?
As mentioned earlier, an employment agreement would contain the terms and conditions that the employer and employee have agreed upon. Part of the terms and conditions stipulated would include
- responsibilities and duties of the employee and employer;
- place of work;
- contracted hours;
- statutory privileges;
- minimum wages;
- leaves (vacation leaves, sick leaves, annual leaves, maternity leaves, paternity leaves, etc.);
- probationary period (if applicable); and
- public holidays observed by the company (local and international).
Types of Employment Agreement
There are two general types of employment agreement contracts that we would like to share with you: collective employment agreements and individual employment agreements. To have a better understanding of what these two are, keep on reading.
Collective Employment Agreement
When we talk about collective employment agreements, these are agreement that are usually negotiated by the registered unions and employers. These types of employment agreement would usually have a better explanation and discussion about individual terms and agreement options. You may also like employment agreement contract samples.
Some things to take note of when it comes to these agreements are the following:
- An employer must not influence an employee, old or new, to join or not join any union.
- If the new hire is a member of the union and they want to show that they agree with what is stipulated in an existing employment agreement, they should sign an employment offer. However, should they refuse to sign, the collective agreement will still apply. You may also check out sample real estate employment agreements.
- Additional individual terms can be added for and employee covered by collective employment agreement.
Individual Employment Agreement
An individual employment agreement is an agreement agreed upon by the employer and employee. Usually, an employer already has an employment agreement template with terms and conditions already pre-filled. These are the most common type of employment agreements out there. These are usually signed by both employer and employer. You can check out more about these employment agreements at Sample Individual Employment Agreements.
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Written Employment Agreements vs. Verbal Employment Agreement
When it comes to an employment agreement, employers are not actually obligated to give an employee a written one. But safe to say, a written employment agreement holds more weight compared to a written one. With a written employment agreement, it would be easier to trace what was agreed upon by both parties whereas for verbal employment agreements, it would be harder to do so. You may also see sample casual employment agreements.
If you are a new hire and you feel a bit unsecured with an employer not handing you a written employment contract, feel free to ask for one. This is not only for your benefit but for the benefit of the employer as well.
There are four situations that would definitely call for the need of a written employment contract:
1. High Level Employee
If you are hiring someone in a high level position, having a well-written employment contract is highly necessary. You want to make sure that they do not use the proprietary property that your company has and make use of it to come up with a competitor company. You may also like sample dentist employment agreements.
2. High Value Employee
High value employees are employees that you cannot afford to lose without giving you a notice. So in the agreement, you need to strongly state that you would require a notice from him/her and the amount of time they would need to give as notice. You may also check out sample self-employment agreements.
3. Picky Employee
If you and your newly hired employee seem to not agree on a lot of aspects regarding the nature of work, having an agreement will help to clear things out and ensure that you have come to an agreement that would make the employment go as smooth as possible.
When hiring a freelance employee, you want to make sure that you make everything about the job crystal clear to him/her. The agreement can serve as a reminder of the duties and responsibilities expected from him/her. Check out Sample Freelance Contract Agreements for more information.
Writing an Employment Agreement Template
We would like to let you know how you can start drafting an employment agreement template. By following the simple guidelines we will be sharing, we are sure everything will go as smooth as possible. Continue reading to find more interesting facts about employment agreements.
1. Preparing to Draft One
- Refer to the samples attached. By taking a glimpse at the sample employment agreements that we have included, you will be able to familiarize yourself with how the wordings go for these agreements and how these documents look like in general.
- Review the job description. If made use of job description for your job advertisements, you will be able to draft the list of duties and responsibilities of the new hire easily.
- Think of what your company owns. This would include any patent and intellectual property of the company. These are proprietary as they are not open for dissemination to the public. For these situations, a non-disclosure agreement statement would be a good addition to your agreement.
- Think about resignations and terminations. You have to discuss properly in the agreement what would happen and what are the proper protocols that the employee needs to abide by should these situations arise.
- Ask your company lawyer. If you are unsure of any section you have drafted, do not hesitate to ask a lawyer.
2. Making the Draft
- Title. The title would typically be found center aligned in the document in a large or different font size and style.
- Involved. Just like any other general contract, you would need to identify who is involved. In this case, it would be the employer (company name) and the newly hired employee. You may also see sample individual employment agreements.
- Benefit of Consideration. To simply put it, your agreement would ask for the employee to render services whereas you, the employer, would benefit from the services rendered by the employee.
- Contract Validity. Do not forget to state how long the contract is valid for. For example, if the employment agreement is for a probationary period only, state that the agreement is valid until the end of the probationary period only. You may also like sample physician employment agreements.
- Duties and Responsibilities. Do not forget to discuss what are the duties and responsibilities of the employee are. Make sure that you describe it in a clear and concise manner.
- Compensation. Give the employee an idea about how the compensation is computed and how often payout would be. This would have probably been discussed to the employee already during the interview but stipulating it in paper via your employment agreement will help to make it clearer to the employee. Also discuss the mode of compensation: cash, check, or bank deposit. You may also check out sample sales employment agreements.
- Benefits. List down all of the benefits that the employee is entitled to. Make sure you do not miss any detail as this is also important.
- Performance Reviews. Discuss how often performance reviews are conducted and what are the metrics used during this situation.
- Limits. Discuss the limitations on proprietary information and email. This would ensure that the employee is well aware of what the boundaries are when it comes to being associated with the company. You may also see sample executive employment agreements.
- Termination. Discuss clearly what situations call for the need of termination and if warnings are to be issued prior to any termination.
- Policies. Any policy you have in the company, you should discuss in detail in your agreement. Include the corresponding consequences if any of the policies are not followed by the employee.
- Signature and Date. Make sure that you leave a section where you and the employee can affix your signatures and the date when the contract was signed. You may also like employment termination agreements.
3. Revisions and Edits
- Have an attorney read through your contract. Ask to give input on what areas seem unclear and if wordings are correct or incorrect.
- Discuss the contract with the employee before printing it. This will ensure that everything stipulated in the contract is clear and agreed upon.
- Take your time in redrafting. There is no need to rush.
- Make sure that language used is simple and easy to understand. Avoid jargon and shortened words as this is a formal document.
- Make sure to secure two copies for you and for the employee.
Need more tips with regards to writing an employment agreement? Make sure to check out How Do You Write a Contract Agreement?
Making Changes in an Agreement
Time might come where you see that there are changes that are needed to be made to employment agreements to cope with changing times. Here’s how you can go about these changes in the contract.
1. Employer wants the change.
If you, the employer, would like to make a few changes to an agreement, you should make sure that you consult with the HR department and discuss all matters regarding the change.
2. Employee wants the change.
If your employee wants the change, make sure to ask for some input as to why he/she deems change is necessary. Changes desired by an employee, however, are limited to those that are covered by legal rights such as working hours.
We hope you learned a lot from reading our article. Be sure to take a look at What You Need to Know about Employment Contracts for more information.
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