About Small Business Employee Contracts
A small-business employee contract is a formal agreement between the worker and employer. It can be used for many purposes, but the contracts usually concern terms of employment. Some small businesses require safety shoes to be worn at all times as a condition of continued employment. Others require a certain standard of dress or availability.
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Significance
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An employee should understand the terms of employment fully before signing a business contract. He should obtain a full job description with all his duties included. Job expectations and hours should be outlined in detail prior to entering the contract process. Available insurance coverage should be disclosed as well. The length of employment should be specified unless it is an open-employment position.
A small-business contract serves as a reference for both parties. The employee and employer should keep copies of all contracts signed. Even when they are not notarized, such contracts can be binding in a court of law.
Types
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Insurance employee contracts are usually for the benefit of the employee. Insurance choices can usually only be changed one time per year. Small businesses usually give two basic choices for insurance. It's usually all right with the employer if the new employee takes a week or more to decide on insurance contracts.
Some small businesses may require employees to sign a confidentiality agreement. This contract will make sure that the employee does not pass on business information, secrets or tricks of the trade to anybody else. This is sometimes important for cooks who learn well-sought-after recipes in small restaurants.
Probationary-period employee contracts are usually given to new employees. This allows the employer and employee to see if the relationship is working out within the first few months. It's usually obvious at that time if the employee is happy and if the employer is satisfied with his job performance. Employment then becomes a more permanent situation. Getting this in writing helps avoid confusion later on. It also serves to let the employee know that he must do his best at his job.
Some small-business owners choose to have behavioral contracts. If the employee gets written up a certain number of times for breaking business policy, procedures or rules, employment may be terminated.
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Function
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The small business first determines what it needs from a worker, how much the position is worth in payroll terms and the length of employment that necessary. Other perks are also decided on.
There is usually no room for negotiation in standard employee contracts. However, some high-profile positions have terms that are negotiable.
The function of the contract is to serve as tangible evidence of the agreement between employee and employer.
Features
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Small-business owners often protect themselves by putting an arbitration clause in employment contracts, in which both parties agree to negotiate any possible disagreements through an arbitrator instead of taking it to court. The arbitrator acts like a private judge.
Warning
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A small business should always put the agreement between employer and employee in writing. There will be a verbal contract stated upon hire if it is not signed on paper. This is true for any work agreement, but this affords much less protection to the employer in case something goes wrong throughout the length of employment.
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