Are employment contracts needed? The employment contract (or employment agreement) is an essential document.  It ensures that both you the employer and your employees have a clear understanding of what is expected from both parties during employment. Why? Read on and we’ll tell you why it’s necessary for all small businesses, regardless or size or revenue to have employment contracts in place for all employees.

In particular for the employer, an employment contract is important as it provides the security of knowing that a new employee is 100% aware of their obligations and terms of employment, which can ease the risk of taking on a new employee. An employment contract may also provide you with the added security of protecting your clientele and intellectual property from employees who leave your business or your competitors.

In addition to this, an employment contract outlines job specific requirements for your new employee, intellectual property, the location of work, confidentiality for employers, leave entitlements, pay rates and other employment. Good contract templates are not limited to these items and in the case of a Newbi employment contract template, include much more.

Many small business owners are playing with fire by failing to implement an employment agreement when a new employee is hired. Often, it’s due to the belief that the correct documentation is too time-consuming to implement, or it’s not needed for a small business or it’s too expensive. This is actually far from the truth. Think about it: what might happen if a disagreement between both parties occurs and you don’t have an employment contract in place? How would you prove what was agreed between both parties at the commencement of employment and the conditions of employment without a written agreement? This is one very good reason why it is important to have an employment contract in place for all of your employees, regardless of their employment status or your business’ size.

Without a well-drafted employment contract in place, rights and obligations of both parties can be misunderstood which can potentially put your business at risk of false claims by employees in regard to contractual pay and entitlements and conditions of employment.  That is why implementing a written employment contract for all staff is a smart decision for any business.

Quality written employment contract templates are an investment in your business and a risk-mitigating activity, much like your building insurance or public liability policy. Business owners should always consider the investment to implement proper employment documentation as low cost, in comparison to the potential cost of legal fees and potential back payments as a result of an employment related dispute which you cannot defend.

Newbi assists small business owners in obtaining the protection they need by providing an affordable, easy to use online option. Get in touch today or head to our online store to view our range of employment contracts and other agreements.

If you still aren’t convinced of the question: are employment contracts needed? and would like specific HR advice for your business, head over to our HR Partner Industryus HR