As a preliminary matter, you should have properly signed written employment agreements with your hired workers.
Oral contracts are risky because they invite wage and hour labor law violation disputes. This can mean a disgruntled worker hires a labor lawyer to make your life miserable in or out of court and possibly an investigation by the government into whether or not you’ve violated federal, state, or municipal employment laws. When it’s your word against an employee’s version of what was agreed to, chances are you’ll lose.
Although each employment agreement is somewhat unique because of an employee’s job responsibilities, amount of compensation, and other variables, there are three common issues you’ll want covered in your contracts to reduce legal headaches and improve employee relations.
1. Term or At-Will Employment Agreements?
Make it clear in your agreements whether employees are being hired for a specific term (e.g. one year term that’s renewable) or are at-will workers, i.e. you can fire them for just about any reason that’s legal (illegal terminations typically involve discrimination because of an employee’s race, ethnicity, gender, age, disability, etc.).
2. Paid Days Off
Have a consistent policy on when your workers can take time off and still get paid even though not working.
Paid holidays when your company is closed is a common benefit given (e.g. Christmas and Thanksgiving).
In addition, many employers provide paid time off (PTO) each year that accrues as the employee continues working for you. In the past, this was separated out by companies as paid vacation, paid sick leave, etc. For human resources purposes, it’s often easier to lump these days together as PTO and let the employees choose the reason for taking each day off.
3. Preventing Unfair Competition
If an employee has a non-management job without access to your company’s customer lists, business plans, or trade secrets (e.g. janitor), it doesn’t make sense to prevent that worker from going to work for a competitor or the unlikely scenario of trying to start of a competing venture.
However, if an employee has a managerial role in your company or otherwise has access to insider information that could be used to harm your business if a competitor had it, you should consider including reasonable non-competition provisions in the employment contract to prevent your worker from harming your business after quitting or being fired.
LegalFormsMart.com provides employment agreements online that companies can use to cover these labor issues.