What Every Employment Contract Should Include

All employers should understand the importance of  an employment contract, especially if they run a small business. A formal agreement ensures all parties understand their responsibilities and compensation. Without legal documentation, employees may lack clarity on their role or even take advantage of business owners’ good faith. To protect yourself and your enterprise, ensure your employment contracts include the following.

Explanation of Anti-Discrimination Policy

Employment practice liability insurance is a safety net if your employees allege discriminatory hiring or advancement practices. However, you can also protect your company by including your anti-discrimination policy in your contracts. By signing the document, employees attest that they read and understand your policies. Should workers violate the policy, they also violate their contract. 

Details of the Position

When considering what to include in an employment contract, your first concern should be position details:

  • Employee’s regular responsibilities
  • Time frame of employment and expected hours
  • Explanation of job evaluations
  • Skill and education requirements

If workers don’t adhere to their job description, they violate your agreement, and you have an avenue to find a better-fitting candidate.

Procedures for Termination

Employers and employees should part ways when an arrangement doesn’t work out. Outlining the procedures for termination ensures all parties know what to expect during the process. Depending on the position, termination clauses may include the following:

  • How can either party initiate the process
  • What the severance package contains
  • What employees cannot do after leaving your employ, such as working for a competitor

Explanation of Benefits

Employees want to know what they get in exchange for their time and skills. A detailed benefits explanation allows workers to best use their compensation. In addition to pay, this section should include the following:

  • Amount of vacation time and process for requesting it
  • Sick pay policy
  • Bonus amounts and calculation process

Description of Technology Policy

Most people have a mobile device they carry at all times. While this technology offers benefits, it can also detract from work. If your enterprise has a policy limiting the use of personal devices, include it in the employment contract so new hires understand expectations from day one.

In some cases, personal devices can put client or company information at risk. If you work with confidential information, clearly state what employees can and cannot do with employer-owned technology. For example, outline the procedure for reporting lost company laptops and other equipment.

Guidelines for Career Advancement

Putting a clear path for career advancement in writing may help you avoid filing an employment practice liability claim. Employees interested in promotion can use these guidelines to achieve their goals. Additionally, specific criteria ensure supervisors and others involved in career advancement decisions don’t inadvertently discriminate due to unconscious biases. Instead, employees have a level playing field and rise through the ranks on their merits. Subsequently, owners and executives can rely on an Employment Practice Liability plan to help them cover themselves for any issues that may arise. 

About Haughn & Associates

Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.