One thing that many business owners do to protect their organization is draft employment contracts for each of their employees. The purpose of an employment contract is to designate specific tasks and duties and protect the interests of the employer and the employee. However, a contract may have advantages and disadvantages depending on its terms.
That being said, it is important to know that an employment contract is a choice and not mandatory for businesses. The main concerns of an employer include wage, discrimination, and compliance issues. Still, you may wonder whether an employment contract is right for your business. The best way to find the answer is to consult an expert. Click on this website to learn more.
Benefits of employment contracts for your business
Save time on employee training.
Every time an employee resigns with or without prior notice, a lot of time and money is spent on training a new employee to replace the resigning one. Instead of spending time and money on training employees, again and again, you could use them to grow your business. An employment contract with a commitment clause outlines how long the employee should stay in the company. This prevents employees from leaving all of a sudden.
Reduction in disputes.
One of the biggest benefits of employment contracts is the reduced number of disputes between the employer and the employee. For example, if there is a dispute regarding payments, they can quickly go over the payment clause in the contract to resolve the issue.
Every successful business has certain intellectual properties that make them stand out in the market. When you allow employees in your company, you are forced to share your IP and trade secrets with them. Drafting a contract with restrictive covenants and the consequences of leaking private company information is helpful.
Disadvantages of employment contracts
Strain in the employer-employee relationship.
Including too many restrictions and rules in the contract can strain the employer-employee relationship and prevent talent from joining your company. The employer will be more eager to complete their working period and leave as soon as it ends.
Complexities in termination.
An employment contract usually lists the specific terms for terminating an employee. When you include very specific details, it becomes to terminate an employee that you no longer wish to keep in the company.
There are both benefits and detriments of employment contracts. If including employment contracts in your business is a must for you, a business attorney can ensure you draft the document correctly and include terms that benefit both parties.