Employee contracts are one of the most common and important documents a small business will use. Ensuring their accuracy is essential for effective operations, employee management and avoiding future disputes.
What every employee contract should include
Employee contracts can include a range of items, unique to each business and their needs. That said, there are a few common inclusions that each employee contract should aim to cover:
This section should describe the employee’s official job title, department, a reasonably comprehensive description of their duties, and when/if those duties can be changed. It’s essential that each employee has a clear understanding of what their responsibilities are from the beginning of their employment.
An employee’s compensation details should be understood from the beginning of their employment. These details should include:
- The type of compensation the employee will receive – salary, hourly, commission, bonus.
- When the employee will receive their compensation – bi-weekly, semi-monthly, monthly.
- How often the compensation will be reviewed, and entitlement to any increases
This section should include the organization’s time off policy – including sick days, personal days, vacation days and any other specific absences the employer will allow. The time off section of an employment contract should also outline how an employee would request their time off, if they may bank time off not used, and which types of absences will be paid or unpaid.
Employment period and type of employment
It’s essential that the employment contract include the type of employment (full-time, part-time, seasonal, casual, temporary) that the employee holds. It’s also important to note the employment period, whether it’s a permanent, temporary, contract or seasonal position.
Ensure that you include a section as to why an employee may be terminated (uninformed absences, breach of confidentiality, etc.) and the process that ensues – including the notice required by the employer.
Whether or not you’ll be issuing any form of benefits for your employees, it’s important to note in the employee contract. It’s also essential to cover what type of benefits you offer and the amount of coverage you’ll be giving for each one.
Restrictive covenants and confidentiality
Rules of confidentiality should be covered in an employment contract and are usually unique to the nature of the business. Some businesses choose to also have non-compete and non-solicit covenants, which further prevents your employees from either starting a similar business or soliciting clients, customers and employees within a certain period of time.
Employment Standards Act
All employers must follow the requirements of the Employment Standards Act, which provides rules around compensation, vacation, termination, and other key employee matters. Make sure you are aware of your obligations under the Act and that you stay up to date on any changes to it.
Ensuring that the language in your employment contracts is accurate is essential for effective employee management and avoiding conflicts. Especially with the continuous changes within the workforce due to COVID-19, it’s important to keep up to date with what is needed in employment contracts. As such, hiring a small business lawyer to create and review your employment contracts can ensure their accuracy and relevancy. If you are in need of one, please don’t hesitate to contact us today!