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What components should be in an employment contract?

Employment contracts are legally binding documents that provide important details about employer and employee obligations and expectations. Not all employment offers and contracts are the same. Some contracts may benefit the company more than the workers. People who are thinking about accepting a job offer in Chanhassen should take some time to learn about the key elements their employment contracts should include so they can avoid complications in the future.

Employee classification

All employment contracts should specify employment type. Some employers classify their workers as independent contractors so they do not have to provide benefits such as overtime. However, there are distinct differences between contractors and employees, and a company that misclassifies workers in their contracts could face serious tax consequences, among other legal issues.

Compensation and benefits

Employers should include specifics about employee pay, such as the amount they can expect to earn per hour or work period and the frequency of pay. They should also provide detailed information about any benefits that the worker is to receive, such as health and disability insurance, company shares, vacation time and any other applicable benefits that can affect their pay. For example, employers should include how pay, bonuses and sick and vacation time are calculated.

Job responsibilities

An employment contract should clearly outline major job responsibilities and duties to give employees a clear view of what their work obligations are to the company. Clearly outlining what is expected of workers in an employment contract can help to keep them accountable to themselves and their employers.

Termination terms

Termination dates are typically not included in contracts for at-will employees. However, other types of workers, such as contractors, should have details regarding their expected length of employment included. Contracts that have end dates should also include renewal stipulations. The guidelines regarding renewability should be comprehensive to limit confusion and conflicts.

Employers hiring workers as at-will employees can fire them for almost any reason, or no reason at all. Employees who are not at-will workers typically are subject to the rules that govern just cause severability. Employers should clearly detail all factors that are just cause grounds for termination in employment contracts. This transparency can also help to prevent wrongful termination claims.

Because employment contracts define the relationships and expectations between employers and their workers, potential employees should read their contracts thoroughly before signing them. If there are areas or terms that are unfavorable, potential workers should consider negotiating better terms that are more beneficial to them. Matters involving employment contracts can become complicated to handle alone. People who are dealing with an employment dispute or need assistance with contract negotiations should speak to an attorney to learn more about their options.

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