If you're like many small business owners who got their start as the sole proprietor but are now planning on branching out to include employees, you're probably looking forward to expanding your business and having others available should you need help. However, you may also be concerned, for good reason, that having employees also means an increased potential for legal issues such as lawsuits and disputes over employment laws and regulations.
It is important for small business owners to have a well-written employment contract in place to protect the interests of both the business and the employee. Fortunately, you can circumvent the vast majority of issues by having a good employment contract in place. An employer attorney can assist with drafting and reviewing employment contracts to ensure their legality and enforceability.
Small business owners need to be aware of the following key points when it comes to employment contracts:
- Legal Requirements — Employment contracts must comply with federal, state, and local labor and employment laws. This includes minimum wage, overtime pay, and anti-discrimination laws.
- Offer of Employment — an employment contract should clearly state the job description, compensation, and benefits offered to the employee.
- Duration of Employment —The contract should specify whether the employment is at-will or for a specific term, and any conditions for renewal or termination.
- Dispute Resolution — The contract should specify the process for resolving any disputes between your small business and the employee.
- Confidentiality and Non-Compete Clauses — An employment contract may include clauses that protect the confidential information of the small business and prohibit the employee from competing with the business after termination.
- Benefits and Perks — Benefits and perks such as health insurance and paid time off should be thoroughly covered in the contract.
Additionally, employment laws and regulations are subject to change, and an outdated contract may not adequately protect the interests of either the employer or the employee. Contracts should be reviewed and updated regularly to ensure they remain compliant with changing laws and reflect the current needs of the small business.
Although employment attorneys are commonly associated with litigation against employers, such as wage-and-hour, wrongful termination, and harassment claims, they can also provide valuable services to employers such as small business owners. Along with helping you craft an employment contract, they can also provide you with guidance regarding relevant legal matters such as termination procedures, employee discipline, and performance evaluations.
For more information, contact an employer defense attorney near you.
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