11 Things To Check Before Signing An Employment Contract
Reading contracts is not particularly exciting after a long and challenging recruitment process, so many people just gloss over it.
However, it’s important to do your due diligence and understand its terms and conditions to protect your rights and ensure a mutually beneficial working relationship.
Ideally, you may never need to refer to the employment contract again, but it is likely to serve as the primary formal agreement between you and your employer at some point.
To ensure you make an informed decision, here are 10 critical elements you should thoroughly review before signing the document.
1. Job title and description
Verify that the contract clearly states your job title, duties, and responsibilities.
This step is an essential part of the recruitment process to ensure that both the employer and the employee are on the same page. It’s vital that they align with your understanding and expectations of the role, as any discrepancies can lead to complications later on in the employment relationship.
Not all contracts contain a summary of the job description.
If your contract does feature one, ensure it is not too limited nor too expansive. An inaccurate job description might end up taking you down a path not agreed upon at the interview.
If your contract doesn’t include a job description, make sure you are in no doubt as to the expectations around your role before signing.
2. Compensation and benefits
Review the details of your salary, bonuses, commissions, and any other forms of compensation. Check for clarity on how and when you will be paid. Additionally, examine the employee benefits provided, such as healthcare, retirement plans, and vacation policies.
3. Work schedule and hours
Understand the expected work schedule, including regular working hours, breaks, overtime policies, and any flexibility or remote work options. Ensure that they are in line with your preferences and lifestyle.
4. Holidays and sick leave
* Holiday entitlement: The contract should specify the number of days you are entitled to as paid vacation each year.
* Holiday year start: It should indicate when the holiday year begins, ensuring you are aware of the timeframe for calculating your vacation entitlement.
* Main holiday allocation: The contract should outline when you are expected to take your primary holiday or the majority of your time off during the year.
* Carryover policy: It is important to know whether you can carry forward any unused vacation days to the following year and, if so, the maximum number of days that can be carried over.
While local employment laws typically govern these aspects, it is possible that your company offers additional vacation benefits or has specific requirements regarding the timing of your time off.
5. Duration and termination
Determine the duration of the employment contract, whether it is for a fixed term or indefinite. Familiarize yourself with the notice period required for resignation or termination, and the conditions under which the contract can be terminated.
PS! If you ever need to write a contract for employees or service providers, it’s totally okay to use employment contracts templates available online and then just let a lawyer review it to make sure it’s legally bound.
6. Probationary period
If applicable, review the terms and conditions of any probationary period. Understand the length, evaluation criteria, and rights during this period.
7. Non-compete and confidentiality agreements
Check if the contract includes any non-compete or confidentiality clauses that restrict your ability to work for competitors or disclose sensitive information. Ensure that the restrictions are reasonable in scope and duration.
8. Intellectual Property rights
If your work involves creating intellectual property, review the provisions regarding ownership and rights. Clarify who retains ownership and whether you are entitled to any royalties or recognition.
* Ownership: The contract states that any intellectual property created by the employee during the course of employment belongs exclusively to the company.
* Royalties and recognition: The employee will not receive any royalties for their intellectual property but will be recognized for their contributions through internal acknowledgments and awards.
9. Dispute resolution and arbitration
Understand the process for resolving disputes, including whether arbitration or mediation is required before legal action. Assess if the chosen method is fair and acceptable to you.
10. Training and development opportunities
Assess the provisions related to training, professional development, and advancement opportunities. Determine whether the company supports ongoing learning and growth.
Specifically, look for:
* Training programs: The contract guarantees access to company-sponsored training programs and professional development opportunities to enhance the employee’s skills and knowledge.
* Advancement opportunities: The company is committed to promoting internal growth and will provide opportunities for career advancement based on performance and availability of positions.
11. Company policies and code of conduct
Familiarize yourself with the company’s policies and code of conduct as referenced in the contract. Understand your rights and obligations, as well as any disciplinary procedures.