As the economy adjusts to life with COVID, employment is on the rise. US businesses added 1.37 million jobs in August, according to the Bureau of Labor Statistics. With this positive hiring trend, it’s time for employers to review and update new-employee documents.
Depending on the job and your workforce, the most important documents to have a new employee sign are an employment contract, non-disclosure agreement, and acknowledgement of having received and read the employee handbook.
An employment contract details terms of employment and expectations for both the employee and employer. Employment contracts can protect an employer from losing confidential or sensitive information, and generally are helpful in keeping employees onboard as these agreements are binding.
A good employment contract should include:
- Length of employment – This should include a start date and end date if one is known or note indefinite. If the employer has any expectations related to hours per day, week or month the employee is to work, they should be included here.
- Salary – The contract should include wage information, including amount, hourly or salary, overtime, commissions, and pay period details.
- Benefits – This area details health benefits, life and disability insurance, vacation, other paid time off, and any other benefits.
- Employee responsibilities – Include a job description and expectations regarding the employee perform their best effort.
- Grounds for termination – This clause covers at-will termination, where an employer does not need good cause for firing, and actions expected upon termination, such as return of company property.
- Confidentiality or non-disclosure clause – The contract should cover expectations about proprietary company information, such as client lists, trade secrets, processes, pricing, and any other confidential information.
- Dispute resolution – Should employment disputes arise, this clause covers whether they should be mediated, arbitrated, or handled in court.
While the employment contract usually touches on this, it’s important to have a separate non-disclosure agreement (NDA) if the employee will be privy to proprietary and sensitive information. An NDA protects the employer from having information disclosed to vendors, clients, competitors, and the general public. This agreement spells out the employer’s expectations of confidentiality and legal ramifications if those expectations are broken. The NDA usually prohibits employees from copying and using proprietary information in any way that is not authorized by the employer.
A typical NDA covers:
- Parties to the agreement
- Description of the owner of the confidential information
- Time frame for the agreement
- Definition of the confidential information
- Reasons why the information is confidential
- Information that is not confidential, such as that already out in the public or received from a third-party
- Dispute resolution clause that discusses how the parties handle a breach
Employee Handbook and Acknowledgement Form
It’s important to have an employee handbook that covers employees’ rights, company policies and procedures, employment expectations, and benefits. A good employee handbook can protect an employer in a lawsuit, particularly discrimination or unfair treatment claims.
Employee handbooks are broken down into sections, generally including:
- Company history, mission, values, and vision
- Compensation, benefits, and any other perks
- Codes of conduct, including dress code, internet and phone use during work hours, smoking and substance use, and other expectations for professional demeanor
- Equal opportunity and anti-discrimination/harassment policies, including complaint procedures
- Family and medical leave policies
- Workplace safety and security
- Digital conduct and social media policies, including how employees talk about and represent the company online
- Nondisclosure and conflicts of interest
The handbook needs to be regularly updated to reflect new laws, changes to employment regulations, updated and new company policies, and any other pertinent legal or corporate changes.
Employees should be asked to sign an acknowledgement that they have received and read the handbook. A copy of this signed document should be kept in each employee’s file. Should a dispute arise, this acknowledgement signifies the employee was aware of corporate policy.
With the recent upswing in employment, employers should be prepared with good employment documents. Not only will these make for a smoother work environment, but they can also protect the employer should something go wrong.
Employment Document Experts
Any employment-related agreements should be reviewed by an attorney. The experienced attorneys at InPrime Legal can help you write or update employment contracts, non-disclosure agreements, and employee handbooks. Contact us at 770-282-8967.