Essential Elements of Employment Contracts
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An employee contract is a binding document that clearly defines the expectations of an employee and the nature of the employment relationship.The agreement should be written for the benefit both parties and outline all the terms and conditions of the employment offer, prior to applicant’s start date, so there are no surprises. Once the offer is accepted, and the agreement is signed, an employee/employer relationship has been consummated.

While such contracts may cover criteria and minutia that are specific to a particular company or work environment, nearly all of them share the following universal clauses:

  1. Responsibilities of the Employee

    This portion will be different for not only each company, but for every single hire. That said, there should be a formal job description for every position, and it should be similar to what was indicated in the company’s employment description in the recent past.

  2. Employment Term

    This, in layman’s terms, simply refers to how long the hire will be employed. In California, all employment is presumed to be on an “at-will” basis unless there is contract that otherwise provides for a required duration of employment. Accordingly, most situations are usually noted as “employment at will.” This means employment may be terminated by either party at any time with or without cause.

  3. Time Off

    This part will include what the employee is entitled to for sick days and vacation time, and how each is accrued. It may also cover family leave and bereavement, as well as penalties for missed days from work that are unexcused.While under California law, an employer is not required to provide vacation time, there are various laws and regulations that apply to certain employers with respect to sick time and family leave.

  4. Assignment and Ownership of Work Product

    This provision expressly provides that any intellectual property created for the benefit of or related to the employer’s business by an employee, while working for the employer, are the sole property of the employer.

  5. Non-disclosure

    A non-disclosure clause is included to keep employees from sharing confidential information, such as trade secrets, client lists, and other proprieties, at the present time, or in the future.

  6. Benefits

    This section will break down health insurance, retirement accounts, disability pay, life insurance, stock options, profit sharing, and the like. It will explain what is offered and how to apply for specific perks.

  7. Termination

    This is a clause that is necessary for pointing out all possible grounds for dismissal if the employer is going to make a distinction between cause and on-cause termination.

  8. Dispute Resolution

    This should list all possible avenues to follow, including proven methods like arbitration or mediation, which can be effective without involving litigation.

    There are many other options for clauses that can be included in a standard employee contract. The ones listed above are some of the most common and important elements. They are of importance because they work to the advantage and protection of both parties, leading to a productive and stable partnership.

Have Questions About Drafting a Professional Business Contract?Contact an Experienced Business Lawyer in Los Angeles Today

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