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What defines a valid employment agreement?

On Behalf of | Sep 2, 2021 | Contracts

You opened your first business recently, and you feel ready to hire your first employee. Do you know the elements of a sound employment agreement?

Chron breaks down the elements of a legal agreement between employer and employee. Set your business, yourself and your first employee up for success with a well-written document.

Defining the agreement

You may establish a written or verbal agreement; both stand in the eyes of the law. If you make promises of employment, the other person could consider that an implied and binding verbal agreement. With an explicit agreement, you define the other party’s compensation, job role and work schedule in writing.

Implied agreement

Other than verbal statements, job candidates may consider an employee handbook’s contents as an implied agreement. The same could apply if you discuss job responsibilities, benefits or pay during an interview or with a current worker. To avoid entering an implied agreement, do not make promises while meeting with job candidates or in a job offer letter, and exercise caution with the wording in your employee handbook. Also, clarify that you and the employee have an at-will relationship that either party may end at any time.

Written agreement

Use intentional wording in your written agreements, and clarify that you may add or alter job duties. The agreement is also where you may note you do not have to offer employee benefits. Even if you provide benefits, note that you may change them, but also that you inform employees of changes to their benefits. It also makes sense to clarify whether the new hire agrees to at-will employment. Otherwise, the person could think they sign an employment contract.

Hopefully, all goes well with your first hire. Well-written agreements set the tone for the relationship and help reduce confusion.