Do you need the protection of an employment agreement?
Employment agreements can be useful, but for very different reasons depending on your position. As with any agreement, there are two sides to the coin.
As an employee: If you’re expecting stock options or other benefits beyond the normal salary and health benefits, then it could be beneficial to you. In these cases, you want to protect those perks. Ask yourself, “What would make me so regret joining this company that I’d do just about anything to get out?” Beyond a cut in salary, you could consider the use of a company car, an opportunity to buy into the business after a certain amount of time, or a promised share in profits. An employee agreement will help solidify these compensations that make you want to stick around.
As an employer: An employment agreement is helpful if the person’s departure will hurt you. For example, if they can take clients or customers out the door, or if their departure means they’re taking part of your workforce with them. If you’ve got a few key employees who are responsible for a lot of your sales, you’ve got a lot of the value of the company locked up in those people and you want to lock them in. In cases like these, an employment agreement is certainly worth considering.
Learn more about employment agreements in one of our free downloadable resources courtesy of our sister training company, WagonheimU:
The Contractor’s Pocket Guide (Construction)