What should be included in an employment contract?

After hiring a new employee, drafting and signing an employment contract is a crucial step. This raises the question of which clauses are essential and which are recommended to include. Our firm, Nonzerosum, helps you consider the key legal elements in hiring.

The core of an employment contract is the delivery of work performance. As an employer, you offer work, and the employee commits to performing the agreed-upon tasks diligently. In return, the employee receives compensation, namely their salary. An employment contract without salary is not an employment contract. The salary must be specified or determined, such as a fixed monthly salary, hourly wage, or commission. The amount and calculation method of the salary are freely negotiable.

In an employment contract, the employee performs tasks in a subordinate relationship to the employer. This means that as an employer, you can give instructions and oversee the execution of tasks.

In addition to these essential elements, there are several recommended clauses that you can include in an employment contract.

A non-compete clause prevents an employee from working for a competitor and sharing information after the end of their contract. Conditions for such a clause include that the activities must be comparable, the duration may be a maximum of 12 months, and a compensation fee must be provided.

Although the law already prohibits employees from disclosing trade secrets during the employment contract, a confidentiality clause can further specify this. This allows you to clearly indicate which information is confidential and must not be shared. You can link a payment of damages to the disclosure of such information.

If an employee produces an invention or creative work, such as a book, during their employment, the copyright generally belongs to the employee. By including a clause in the contract, you can assign the economic rights to your company, granting your company the rights to reproduction, adaptation, and publication.

You can also specify in the contract that the place of employment is not an essential part of the agreement. This means that the employee can work at different locations if necessary without it being a contractual issue.

Lastly, it is wise to state that one-time benefits do not constitute an acquired right. This prevents employees from claiming these bonuses in the future by arguing that it has become customary.

Adhering to legislation ensures clarity for employees about what is expected of them. Clarity about the duties and rights of employees leads to clear agreements with staff and a stronger position in case of conflicts. Need help drafting an employment contract or other legal matters? We at nonzerosum are here for you.