Employment applications, employment agreements, and employee handbooks are sometimes neglected by business owners who hire employees. When used in together, a properly drafted employment application, employment agreement, and employee handbook can be effective tools to protect the Company and shield the business owner from some of the risks associated with maintaining employees.
An Employment Application provides the key information on a prospective hire and grants authority to investigate the prospective hire’s credit, criminal, civil and employment background. In addition, it sets forth the Company’s at-will employment policy and permits the Company to discharge the employee if he or she falsified information in the employment process based upon after-acquired evidence.
- Whether the worker is at-will.
- The relationship between worker and employee. Specifically, the agreement should define whether the worker is an employee or an independent contractor. If a Company decides to classify a worker as an independent contractor, it is important that the terms of the engagement and the terms of the agreement meet specific requirements under the IRS guidelines that allow the worker to be classified as an independent contractor;
- The responsibilities and duties of both the employer and the worker;
- The payment structure for the worker. The agreement should also clearly establish how commission is earned and paid, if applicable;
- The procedure for termination of employment or engagement by either employer or worker; and
- Appropriate, non-disclosure, nonappropriation, confidentiality, non-solicit and/or non-compete provisions and work made for hire should be included to protect proprietary information, current customers and prospects of the business, and protect the Company from predatory business practices.
- Provide an in-depth description of company policies and employee expectations beyond what is contained in the employment agreement;
- Address industry specific, applicable federal and state laws, and protect the Company and employees by articulating that the Company will adhere to these laws and regulations; and
- Protect the company from potential disputes regarding the expectations of employees.