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How to Draft Fair Employment Contracts: Advice for Entrepreneurs

employment contract

 

Hiring a team is one of the most exciting steps in growing your business. It’s your chance to bring fresh energy, skills, and ideas into your company. But before your new hires get started, there’s something important you need to tackle: employment contracts.

Employment contracts aren’t just paperwork—they’re key to building trust and setting clear expectations between you and your employees. They outline everything from roles and responsibilities to pay, benefits, and policies. And when done right, they show your team that you’re serious about treating them fairly.

Let’s break down what goes into a great employment contract and how working with an outsourced general counsel can make the process as easy as possible.

Why Employment Contracts Are Essential

Employment contracts create the foundation for a healthy working relationship. They:

  • Define roles and responsibilities so everyone knows what’s expected.
  • Set out clear terms for pay, benefits, and working conditions.
  • Protect you and your employees if issues arise, like disputes or misunderstandings.

A well-written contract doesn’t just protect your business—it also makes employees feel valued. When the terms are fair and clear, it builds trust and helps you create a positive, productive work environment.

Key Elements of a Fair Employment Contract

Here are the must-have components every employment contract should include:

  1. Job Title and Description

Be specific about the job’s responsibilities. Include the employee’s role, key responsibilities, and any performance expectations. A clear description prevents confusion and keeps everyone on the same page.

For example: Instead of saying “Marketing Manager,” detail their duties, like “overseeing social media campaigns, managing ad budgets, and analyzing campaign performance.”

  1. Pay and Benefits

Money matters, but benefits matter too. This section should cover:

  • Salary or hourly rate and how often payments will be made.
  • Any bonuses, incentives, or commissions.
  • Benefits like health insurance, retirement plans, or wellness perks.

Clarity here shows employees that their work will be rewarded fairly—and helps avoid disputes over pay.

  1. Working Hours and Flexibility

Define what’s expected, including:

  • Regular working hours and overtime policies.
  • Options for remote work or flexible scheduling.

If your company offers perks like flexible hours or remote work options, highlight them. Employees value work-life balance, and being upfront about what you offer can make a great first impression.

  1. Leave Policies

Everyone needs a break, whether for a vacation, illness, or parental leave. Include:

  • How many days of annual leave employees get and how it’s accrued.
  • Sick leave policies and how they apply.
  • Any additional leave, like parental or bereavement leave.

The more transparent you are, the smoother things will run when employees need time off.

  1. Confidentiality and Non-Compete Clauses

Protecting your business is just as important as supporting your employees. A confidentiality clause ensures employees don’t share sensitive company information.

Non-compete clauses can also safeguard your business, but they need to be reasonable. Overly restrictive terms might scare away talent or be legally unenforceable.

Best Practices for Drafting Contracts

Now that you know what to include, let’s talk about how to create contracts that are both effective and employee-friendly:

  1. Keep It Simple

Legal jargon can confuse and intimidate employees. Use clear, plain language so they can easily understand their rights and responsibilities.

  1. Update Regularly

Laws change, and so do your company policies. Review and update contracts regularly to keep them compliant and relevant. If you’ve introduced new perks like remote work allowances or professional development budgets, reflect these in your contracts.

  1. Be Transparent

Walk new hires through their contract and encourage them to ask questions. This creates trust and shows you’re committed to fairness.

  1. Get Legal Expertise

An outside general counsel can help you create contracts tailored to your business. They ensure compliance with local labor laws and eliminate loopholes that could cause problems later.

Why Fair Contracts Are Good for Business

A fair employment contract does more than just meet legal requirements. It helps you build a stronger team and a better company culture. Employees who feel respected and valued are more likely to stay loyal, work hard, and contribute to your business’s success.

On the flip side, poorly written contracts can lead to disputes, high turnover, or even legal trouble. Investing in well-drafted agreements now saves you headaches and costs down the road.

How Uncommon Counsel Can Help

At Uncommon Counsel, we believe employment contracts should work for everyone. Our goal is to help businesses create contracts that are fair, clear, and legally sound—while protecting their interests.

As an outsourced general counsel, we’ll help you draft agreements that reflect your company’s values, meet legal standards, and foster trust with your employees. Whether you’re hiring your first team member or scaling up, we’ve got your back.

Ready to create employment contracts that set your team up for success? Contact Uncommon Counsel today. Let’s make contracts simple and fair for everyone!

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