What you don't know about creating employee employment contracts
Employee employment contracts define the rights, responsibilities and obligations of the employer and employees during the period of employment. Once the employer offers the employee the job and both parties sign the contract, they are bound by its terms.
With DocSuite's AI-powered HR system, you can easily manage employee employment contracts. Besides basic details about the parties, our employee employment contract templates allow you to include information about compensation, vacation time, probationary periods, confidentiality duties, and contract termination procedures.
In this article, we will learn closely how to easily create employee employment contracts.
What are employee employment contracts?
Employee employment contracts are also known as:
Employment agreement
job contract
Employee contract agreement
Employment contract template
Employment agreement
Employee employment contracts specify the rights, responsibilities and obligations of the employer and employees during the period of employment. Once the employer offers the employee the job and both parties sign the contract, they become bound by its terms.
Who needs employee employment contracts?
Employers and anyone who manages employees on behalf of the employer may create employee employment contracts each time they hire a new employee, including:
Small business owners
Human resources specialists
Managers
Recruitment Officer
If an employer does not provide their employee with a contract, the employee can also start creating a contract for both of them to sign.
Please note that independent contractors should not use employee employment contracts to determine the terms of a service arrangement because there are important legal differences between contractors and employees, such as tax obligations. Instead, contractors should use independent contractor agreements.
What are the different types of employee employment contracts?
Employees' employment contracts can look very similar but include very different terms, depending on whether the employer employs them permanently or temporarily and on a full or part-time basis.
Permanent, full-time employment contract
An employee on a permanent, full-time contract must meet the employer's requirements for full-time hours and does not have a pre-determined end date for his or her employment.
There is no standard requirement for full-time work time. Generally, the number of hours required for a full-time employee is determined by the employer, according to the laws in his or her jurisdiction. The Bureau of Labor Statistics defines full-time work as at least 35 hours per week. The IRS defines An American full-time employee is defined as someone who works an average of at least 30 hours per week for a calendar month, or 130 hours per month.
Permanent, part-time employment contract
An employee on a permanent, part-time contract must not meet their jurisdiction's requirements for full-time hours and do not have a pre-determined end date for their employment.
Fixed term employment contract
An employee on a fixed-term contract must have a pre-determined end date for their employment, the contract automatically ends on the end date, and no notice is required from either party to terminate employment at that time. If the employee wants to end the contract early and can do so without consequences, He can submit a letter of resignation to his employer
Employment contracts for employees at will
At-will employee employment contracts allow an employer to terminate an employee at any time, without notice or reason, as long as the reason for the termination is not unlawful.
If an employer wants the right to terminate an employee at will, it must clearly document this within the employment contract, employee handbooks, and employment policies and procedures.
What is included in employee employment contracts?
When creating an employment contract, you can include the following terms:
Type and percentage of compensation
Payment frequency
Vacation time
Specific working hours
Specific workplace
Employee responsibilities
The length of the test period
Confidentiality, non-solicitation or non-competition terms
Terms of termination
What is the probationary period in employee employment contracts?
A probationary period is a specified period of time during which an employer can terminate an employee's employment at any time without cause, notice, or severance pay. Generally, at the end of the probationary period, the employer will review the employee's performance to determine whether he or she will continue to work as a regular employee.
Probationary periods give employers time to determine whether an employee:
It can help achieve the employer's goals
Possessing the necessary skills to perform the required tasks
Fits with the employer's work environment
Generally, once the probationary period ends, the employee becomes eligible for health and other benefits. Additionally, once the probationary period ends, employers must have just cause to terminate the employee.
What is a non-compete clause in an employment contract?
A non-compete clause prevents an employee from working for the employer's direct business competitors during the employment relationship and after it ends. Generally, non-compete clauses can only last for a specific period of time. Additionally, non-compete clauses must meet specific requirements to be enforced, such as Be limited to a reasonable geographic location.
What is the confidentiality clause in employee employment contracts?
A confidentiality clause keeps the employer's confidential information private. Confidentiality clauses can prevent current and former employees from discussing or misusing the employer's secrets, marketing plans, and product information. They can last indefinitely or have an expiration date.
Confidentiality clauses protect employers from many different circumstances that could cause employers to lose their business, employees, and trade secrets.
Additionally, employers can protect themselves during the hiring process. While interviewing an applicant or negotiating a position with a potential new employee, employers may ask them to sign a confidentiality agreement to prevent them from sharing any valuable information they may learn during the interview process.
How do you update the employment contract?
There are a variety of reasons why you may need to update an employment contract. For example, you may want to raise an employee's pay and revise their contract to reflect this change. To record the change in pay, you can use a compensation agreement. To make larger changes, you may need to use a contract addendum.
A contract addendum allows you to make one or more changes to an existing contract without invalidating it. Suppose you need to make a significant change to the job description and current duties of an employee. In this case, using a contract addendum will prevent you from having to create an entirely new employment contract. An addendum must be attached. The contract includes an employment contract and is signed by both parties.
What happens if an employee or employer breaches the employment contract?
When employees' employment contracts are violated, the employer's response depends on the seriousness of the violation. For some violations, an employer may only issue an employee warning letter to its employee. Some employers may consider the following violations to be minor and worthy of an initial warning:
Often late
Failure to complete certain job duties
Loss of employment without proper notice
If an employee continues to violate the employment contract after receiving a warning, the employer may need to fire him or her through a termination letter. Some violations may not require a warning and be grounds for immediate termination, such as:
Breach of confidentiality policy
Failure to follow health and safety policies
Violating the drug and alcohol policy
Misrepresentation of qualifications
Threatening coworkers
theft
When employers breach employees' employment contracts, employees can take action to protect their interests, depending on the seriousness of the breach and if the employee suffers financial loss due to the breach, they may be entitled to damages.
What is the role of the Doc Suite HR system with employee employment contracts?
DocSuite's AI-powered HR system plays an important role in managing employee employment contracts in an efficient manner. It can automate the processes of tracking contract deadlines, managing contract-related documents, and generating reports related to performance and evaluation. It can also use AI to analyze data and provide guidance for improving employee management. Employment contracts and employees in general, and among its features are the following:
Track contracts and deadlines
The system can use artificial intelligence to track contract expiration dates and notify management of necessary updates before contracts expire.
Document management
DocSuite HR can help organize and manage contract documents, such as agreements, terms and certificates, making them easier and more efficient to access and update.
Performance analysis and evaluation
Using artificial intelligence techniques, the system can analyze employees' performance based on their data and provide detailed reports on their performance and the extent to which they achieve their goals and set performance standards.
Guidance for improvement
DocSuite HR can use analytical data to provide guidance and suggestions to improve contract management and enhance employee performance, such as directions to develop specific skills or improve the work environment.
Saving time and effort
Thanks to automation and intelligent analysis, DocSuite's AI-powered HR system can reduce the administrative burden on management and save time and effort in managing employee employment contracts effectively and accurately.