While they require a time investment to develop and share, they can bring tons of benefits to SMBs. An Employment Contract (or employment agreement) is a legally binding agreement between an employer and employee that defines compensation, duration, benefits, and other conditions of the employment relationship. It outlines the rights and responsibilities of both parties during the employee’s tenure.

• When the contract is signed, you may want a notary public present for top-level positions.
• The Employee has the right to participate in any benefits plans offered by the Employer.
• Employment contracts are vital to stay on good terms with your employees as they clearly define roles, expectations, and professional boundaries.
• These contracts can “lock you in” to working for a company for a set period of time or for a set amount of money.
• It also provides you with legal protection and a document to reference in the event that an employee brings a dispute against your business.

The employment contract outlines the rights and responsibilities of both parties for the duration of employment. Both signatures—yours and the employee’s—are required for the employment agreement to stand up in court. A document that both parties do not sign is hard to defend, as the person who didn’t sign it can claim they didn’t know about it. We’ve provided a general employment contract template for you to download and use, as well as a California-specific template since the state has numerous laws and regulations that make creating contracts a bit more complex. If the employee signed an at will employment contract, they will not be able to argue there were any type of implied oral contracts.

Hybrid Contracts

Clearly state the grounds for termination, required notice periods, and any severance packages. This type of contract is designed for employees who are hired for an indefinite period. It provides stability and assurance to the employee, indicating that the organization intends employment contracts for small businesses to employ them for the long term unless unforeseen circumstances arise. Contracts for salary arrangements have detailed requirements, so you need financial and legal advice for these. It is the intention of both parties to form a long and mutually profitable relationship.

WHEREAS the Employer desires to retain the services of the Employee, and the Employee desires to render such services, these terms and conditions are set forth. As North Carolina Attorneys, we serve people and businesses all over the State of North Carolina with assistance on a variety of legal issues. You’ll have the potential employee sign if they agree to the terms of the possible new employee agreement you have discussed. If an employee violates the terms of their contract, it is important to have a clear protocol in place to address non-compliance. This includes clearly outlining consequences and providing support to help the employee get back. At Charlie, we give you the possibility to store all of your legal documents in one place and completely secured by being ISO/IEC certified and GDPR compliant.

How to manage termination of employment in a fair and tactful way

It’s best to have both parties sign and date the employment contract before work begins to avoid potential issues or misunderstandings. Fixed term employment is often seen for seasonal workers or a teammate hired on to help with a particular project. These contracts will terminate after a specific date or milestone is achieved. They are essentially on-call and work when required by the employer.

However, there are certain legal responsibilities beyond payroll taxes that come along when you hire someone (albeit for a short period of time) to help you. If you’re working with or planning to hire full-time or part-time employees without the appropriate business contracts, then you’re opening your business up to legal red tape and hefty financial losses, especially if things go south. With the right employment contracts in place, you can use the global workforce to your advantage in 2023. As you can see, employment contracts are worth the effort — even for small business owners.

Employment Contract: Template, What to Include, and Pros & Cons

Learn about 7 types of employment contracts for small businesses and how to ensure they are enforceable under North Carolina law. Start with giving the agreement the proper title, then identify parties to the contract. After that, list the terms and conditions of the contract, such as working hours, confidentiality policy, and severance package.