Whether you’re the business doing the contracting or the person signing an employment or work agreement, there are some common items that should probably be covered in the document before you put pen to paper in a signature. Everyone probably knows that an employment contract should spell out compensation, but that isn’t always as easy as listing how much per year or hour a person will make. Here are some details you might want to look for in a contract.
Make sure all compensation is included in detail. Does the pay breakdown clearly spell out overtime, bonuses and other additional pay? Ensure that all benefits are listed, including vacation and sick pay, how the company will match 401k contributions and how insurance premiums will be covered. Does the company pay a portion of the premiums, and how much will be deducted from each paycheck?
Next, make sure a contract includes information on how, when and why employment can be terminated. This protects you regardless of which side of the contract you are on. For the employer, it creates a foundation for legitimate termination. For the employee, it reduces the risk of wrongful termination and provides a basis for a legal claim if that happens.
Other common components of an employment contract include nondisclosure agreements, noncompete clauses and ownership agreements regarding materials created during the course of employment and arbitration agreements. You should never sign a document you don’t fully understand, so if you find yourself getting lost in the legal language of a potential employment contract, consider having a legal professional read it over and explain it to you.
Source: FindLaw, “Pros and Cons of Written Employee Contracts,” accessed Aug. 26, 2016