Employment Agreement
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About Employment Agreement
An Employment Agreement is the only legal document between an Employer and Employee that outlines their rights, duties, and obligations during the employment relationship. The Employment Agreement lays down both the employer’s and employee’s rights and obligations in managing employees. Every employee, from the junior level to the CEO, needs an Employment Agreement to manage them efficiently.
Advantages of Employment Agreement
Clarity on expectations
Both parties should be aware of what is expected from them through an employment agreement. In this way, misunderstandings can be minimized and disputes can be avoided.
Protection for the employer
An employment agreement can help to protect an employer’s confidential details and trade mysteries. The contract can also contain conditions that protect the employer from liability if an employee causes damage or harm while working.
Protection for the employee
An employment agreement can help assure that employees are paid what they are owed and that their rights are safeguarded. The contract can also provide some security for employees by drafting the terms of their employment, such as job responsibilities and length of work.
Nondisclosure Clause
A nondisclosure clause in the employment agreement will restrict the employees from disclosing any internal issues or resentments to a third party, which may harm the interests or future possibilities of the company in the competition. The agreement will work as a tool to amicably settle the issues internally by handling the concerns.
Employment Agreement Process flow
1-2 HOURS
2 WORKING DAYS
2 WORKING DAYS
2-3 WORKING DAYS
2-3 WORKING DAYS
Documents Required For Employment Agreement
- The names of the employer and employee
- The start date of employment
- The job title or position
- A description of the duties and responsibilities
- The hours of work
- The rate of pay or salary
- Any benefits or perks
- The length of employment (if it is not indefinite)
- The notice period (if applicable)
- Any other relevant details
Comparison
| Comparison Basis | Private limited company | Llp | Sole proprietor |
|---|---|---|---|
| Raising Fund | ✓ | ✕ | ✕ |
| Start-Up India Recognition | ✓ | ✓ | ✕ |
| Complince Cost | ✓ | ✓ | ✕ |
| Suited For | Growing Startup | Service Provider | Small Business |
| Taxation Benefit | ✓ | ✓ | ✕ |
FAQs
An employment agreement is the sole legal document between the Employer and Employee, which lays out the rights, duties, and obligations of both parties during the utilization period.
- Clarity upon terms of employment
- Dispute Resolution
- Protection of trade secrets
- Restrictive Covenants
Employment bonds are essentially employment agreements that contain a negative covenant and are legally enforceable. The agreement is enforceable if the parties comply with work according to it with their free consent. just in case the employer or employee breaches the contract, the opposite party is entitled to damages. Hence, an employee agreement helps to secure the simplest interests of the employer.
- The agreement must be signed by both the worker and employer by their own free will and with their consent.
- The conditions stated within the agreement must be reasonable.
- The conditions imposed on the worker must be prepared to safeguard the interests of the employer.
- The agreement must be written and signed on a stamp paper, whose value is predetermined and glued as per law.
- Safeguards the interest of the employer
- Gives the worker proper guidelines to follow while working
- Sets expectations for both parties
- Enlists all the conditions the worker is expected to follow
- Lists down all the laws of employment
You don't 'give' an employee a contract - a contract will exist, whether you wish it or not, as soon as someone accepts your job offer.
Yes, this is able to be advisable. Otherwise, you'll be bound by the contract even if the reference is unsatisfactory, and can have to give full notice to terminate.
Yes. Three to 6 months is typical and will be long enough to allow you to judge whether the employee is willing and able to do the job. If there's a probationary period, this must be included within the written statement (along with the other terms and conditions) and given to the employee or worker on or before the day they start work.
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