While an employment agreement can be verbal, written or a mix of the two, it is a good idea to have a written employment agreement to set clear expectations early and minimise disputes.
And the beginning of the employment relationship is when you would typically expect to use an employment agreement.
But did you know there are other times you may wish to revisit your worker’s employment agreements?
Here are some useful tips on how to use an employment agreement.
First, when you hire a worker you should give them sufficient time to review their employment agreement. This is to be fair to your worker and to avoid a situation where a worker says they didn't have enough time to review their employment contract and were forced to sign it quickly.
If you decide to temporarily change a worker's role, It's a good idea to have that change in writing. here is what you should include:
By doing this you avoid the risk of any dispute about expectations for a temporary change to be ongoing.
Directors that are also completing day-to-day work as employees should also have an employment contract that sets out their position.
And, if a director role is unpaid, you should make that clear upfront.
A founders agreement is suitable when you first launch your startup, particularly if you have a few founders and are still figuring out how to divide up roles.
Also paying for a single founders agreement can be more cost effective than paying from multiple employment agreements.
Don't forget you can always pay for employment agreements later on once you have a better idea of how you want to divide up roles at your startup.
But we cover this more here.