Employment Contracts 101: The Top 5 Things You Need to Know

A written employment contract can be a great way to protect your business. It can lay out your expectations and give you certain rights. But, like any contract, an employment contract is a two-way street that imposes some obligations on you as well. Before you sign up for something you didn’t want, it’s important to understand what employment contracts can do. Here are the top 5 things you need to know about employment contracts:

  1. An employment contract can and should be tailored to your individual business and the employee’s position. Include what’s important to you, like a confidentiality clause or how commissions are calculated.
  2. You can set a specific period of employment (like 3 years) or require an employee to give extra notice (like 90 days) before they quit. But remember: you’re bound to those terms
  3. Along those same lines, some employment contracts limit your right to fire employees withoutThis is especially true if you set a specific period of time for employment, so make sure you know what you’ve agreed to.
  4. 4.Not every employee needs an employment contract. You might need one if you’re offering perks to work for you over a competitor or if the employee would be difficult to.

    And most importantly:

  5. ALWAYS consult an attorney before signing an employment contract. Employment law is complicated and you need someone who fully understands what you need and what you’re potentially agreeing to—they aren’t always the same

Good employment contracts reinforce your rights as an employer and protect your business. But in return they impose some obligations on you. Understanding the basics of employment contracts will help you get the contract you need.

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