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Formalizing Your Employment Agreements To Mitigate Exposure Risk

Aug 17, 2007
The Employment Agreement is an important document that sets out the terms and conditions agreed to between the employer and the employee. It implies that the employer shall gainfully employ the employee in a capacity as specified in the terms and conditions of the Employment Agreement.

The Employment Agreement shall detail the date from which employment shall begin. It will also state the rights and duties of the employee as well as any extra duties as may be required from time to time. The work timings of the employee shall clearly state a start time right until he or she is finished for the day as well as require that the employee stays on late, if so necessitated by work requirements.

The employee shall receive all the necessary information pertaining to standards of performing the work, rules, policies and other regulations as may be in force as well as all manuals describing the working environment. Usually the employee is given an Employee Handbook to educate him or her about the company's policies and goals as well as what is required of the employee. These aforementioned rules, regulations, standards for performing tasks, policies and manuals may be continuously upgraded and the employee is bound to adhere to such amendments and changes.

The employee will begin work from a specified date and shall continue working with the employer until such time as his or her services are terminated or until a date specified as being the termination date. Either party may discontinue with the agreement for any reason or a notice period for ending the agreement may be specified in the Employment Agreement.

Compensation paid to the employee by the employer shall be clearly specified as a fixed amount per annum paid an amount as specified in the Employment Agreement, to be paid either every week, month, or every two weeks as well as all "fringe benefits" that the employee is entitled to receive in the course of their employment.

Termination of the Employment Agreement may be due to a variety of reasons. Some of these could be:

* Death of the Employee
* Non performance or unsatisfactory discharge of duties assigned to the employee in spite of notice and warnings to that effect
* The employer's economic plight may warrant termination of the agreement due to circumstances beyond the control of the employer

After the employee leaves the employment of the employer, the Employment Agreement may lay down restrictions that prevent the employee from engaging in like or any other viable business that may be in direct competition as that of the employer.

All disputes arising from the execution of the Employment Agreement will be subject to binding arbitration of the two parties in most cases. Individual parties to the Employment Agreement shall appoint one arbitrator for themselves and the arbitrators so selected will choose another arbitrator and all arbitration will be administrated following the rules of the American Arbitration Association which may be in force and effect at that point of time.

Prior notice is required should the Employment Agreement be assigned and should such assignment be effected it would require mutual consent and approval of every such assignment.

The Employment Agreement constitutes the entire understanding of all terms and conditions between employer and employee unless it needs to be amended, in which case, a separate written agreement shall be signed between the two parties.

The Employment Agreement shall bear the signature of the employer and the employee. It shall also bear the date on which it was signed.
About the Author
Wade Anderson is a CPA and operates DigitalWorkTools.com

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