Human Resources mentor Robert Hoffman responds to the following question from an inc.com user:
Is it possible for you to send me a sample letter/contract of employment?
Robert Hoffman's response:
Employment contracts differ radically by industry, level of employee, location (state of operations), and the objective of the agreement. It would not be prudent for me to suggest that one document can serve multiple needs and situations.
However, I can recommend some specific information that should be included in most documents. I suggest you carefully review the items on this list and then select those that fit your situation. Keep in mind that this list is not all inclusive, nor is it legal advice. As with all legally binding agreements, it's important to consult with an attorney before proceeding.
Purpose of the Agreement
Indicate what services you expect the employee to perform. Include job title, supervisor, and a definition of the employment relationship (full-time, part-time, consultant). Also indicate how long the agreement will be in force.
Outline when, how, and how much the employee will be paid. Always indicate salary on a pay-period basis only (do not imply that an annual salary will be paid). Note any special benefit plans that will be provided to the employee.
Ownership of Materials
Determine who has ownership of all information, drawings, documents, and materials authored or prepared, in whole or in part, by the employee. Don't forget to include a mention about computer software.
Compliance with Company Policy
Always mention the need to conform with company policies, procedures, work schedules, and budgets.
Any potential hire who agrees to your contract should specify that agreeing with its terms does not violate any other covenants, laws, trademarks, copyrights, or proprietary arrangements. This is especially important if a noncompete agreement exists.
Outline how, when, and under what circumstances the contract may be terminated. Mention how employment may be affected if specific objectives are not attained.
In conjunction with corporate bylaws and after review by an attorney, many agreements address the consequences of potential liability. Many companies choose to indemnify employees/contractors against all claims, liabilities, losses, expenses (including attorney's fees and legal expenses related to such defense), fines, and penalties that may arise out of the performance of their duties. Indemnification usually excludes acts that are illegal or contrary to public policy.
Companies should require that reasonable care be taken to keep all information confidential.
To discourage employees from leaving to work for competitors, many employment agreements restrict certain employment after termination. The noncompete clause outlines such specifics as time frame, a definition of competitors, proximity, and how the agreement may be enforced.
Spell out under which state's laws the contract will be governed.
Indicate that the contract constitutes the entire agreement of the parties and supersedes all prior representations and discussions.
Outline the steps necessary to make changes to the agreement. This section may include a grievance or alternative dispute resolution process.
Be sure to include the signatures of those who can sign on behalf of the company to make the document legally binding.
Finally, it's important to adequately explain the company's motivation and reasoning for requesting a formal employment agreement. Similarly, be sure to outline expectations and goals that will lead to the employee's long-term success in your organization.
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