As a business owner, you face a number of potential liabilities. Employees are a common cause of legal issues, but there are ways to minimize them.
No matter what size business you have, you should have a detailed contract that employees sign. This outlines responsibilities and obligations of both the employee and the company.
Benefits of an employee contract
According to the New Jersey Business Magazine, the main purpose of an employee contract is to deal with personal manners in a consistent and fair manner. This reduces confusion about policies and consequences while explaining the logic and reasons behind them.
A contract benefits both the employee and employer. When signed by both parties, it is a legal contract, which means either side can take legal action if there is a violation of any of the terms. However, having a contract in the first place greatly reduces the chances of legal consequences.
Inclusions that a contract should contain
An employee contract can contain a wide variety of things, depending on the specific business. However, there are some basic terms that all contracts should contain:
- Non-harassment and anti-discrimination policies
- Wage and schedule rules
- Leave of absence policies
- Electronic communication policy
Experts advise that contracts should not contain specific violations that result in immediate firing, as this severely narrows down the reasons the company can legally terminate someone.
To further prevent litigation related to termination, the Chron discusses the importance of including a disclaimer referring to employment-at-will. This outlines that it is not a permanent position, and that employment can end at any time due to the decision of the employer or employee.