As your business grows, you may find yourself expanding your team and hiring new employees. Some companies use written documents, including employment contracts, to regulate their relationships.
Although an employment contract is usually not a requirement, there are many ways written agreements can benefit your business and your team.
Protecting your business
An employment contract can include clauses that safeguard your company and its assets. For example, if your business has crucial intellectual property, you should put in writing how you intend to handle the ownership of work that your employees create. You can also include terms that restrict employee ability to take trade secrets to new employers. In addition, non-disclosure agreements can protect sensitive information from your competitors. Finally, you can prohibit former employees from soliciting your team members after leaving the company.
Treating employees fairly
In addition to protecting the interests of employers, employment contracts can also benefit workers. Employees can use their contracts and other written documents to ensure fair payment and employment terms. Hiring documents often detail the benefits associated with the position, including time off and insurance. You can also put in writing your expectations around work responsibilities and compensation. Furthermore, you can describe the terms of employment and potential causes for termination. In the United States, it is common for employers to have an at-will relationship with workers. Finally, employment contracts can include regulations for handling disputes.
As a business owner, you have to manage a complex network of people. Employment contracts can help you clarify your relationships with employees while protecting your company’s needs.