Whether you’ve recently been offered a potentially lucrative job role or wonder if your current employment contract complements the law, it’s crucial to understand everything in an employment contract before signing the dotted line.

If you’re experiencing difficulty in understanding your employment contract or any particular clause, it’s best to consult an employment lawyer.

Nevertheless, all employee contracts must include the following five clauses by law.

Compensation Clause

Any employment contract needs to specify all the compensation details of the employee clearly. With this, the clause must include a compensation amount that compliments minimal wage laws; anything below this amount is a major red flag. But in addition to this, an employment contract must also stipulate any performance bonuses and annual bonuses.

Confidentiality Clause

Employment contracts also typically include confidentiality clauses. These clauses aim to protect the business and the employee. But more often, they solely safeguard the company’s data, trade secrets, and client lists.

Sometimes, you’ll find your contract contains a non-compete clause, which will prohibit you from seeking employment with the company’s competitors or clients. In this case, it’s essential to consult an employment lawyer to exit the clause legally. In addition, other types of confidentiality clauses include nondisclosure clauses and employee non-solicitation contracts.

Employment Contracts

Leave Entitlements

Employees are entitled to various kinds of leave; sick leave, family responsibility leave, annual leave, and others are applicable in this clause of the employee contract.

Leave entitlements must complement the labor laws; employees are entitled to a set number of sick days, annual leave days, and others like sabbatical leave. If your contract allows fewer leave days than the standard, it’s wise to consult an employment lawyer.

Termination Clause

Another clause that all employment contracts must contain is a termination clause, which is sometimes called a severance clause. This policy must clearly outline the employees’ rights during the termination process. Moreover, this clause must also include resignation packages and notice periods.

Job Role Responsibilities

Lastly, an employment contract must also clearly specify any and all job role responsibilities. In this clause, the job role must be explained by outlining each employee’s responsibility.

Reading through the listed responsibilities and job role descriptions carefully is essential. There are times when this clause contains phrases like “and other duties,” which can mean you’ll be expected to do anything and everything that’s not actually a part of your profession. The contractual terminology here can be misleading, and you won’t want to find yourself dusting shelves or mopping floors if you’re an accountant, so be sure to check these specifics.

Essential Steps To Take Before Signing An Employment Contract

Now that you know which essential clauses your contract must contain, it’s also important to carefully read through any employment contract before signing. Be sure that each clause aligns with labor laws.

If, after reading the contract, you are at ease with the offering, it’s then wise to consult an employment lawyer to determine if the agreement is legally binding and in line with labor laws. Next, you can start negotiating your salary with the employer and sign the contract when you are ready.

Keep in mind that you have some time to sign the contract, and if the employer is rushing you to sign, note this as a red flag.

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