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How to craft an employment contract in a New York business

On Behalf of | May 25, 2023 | Business Formation And Planning

Creating a new business in New York is an exciting venture, with countless considerations and tasks to complete. One of the fundamental aspects to address is the preparation of employment contracts. These agreements serve as the foundation of employer-employee relationships, outlining responsibilities, expectations and rights on both sides.

An effective employment contract not only complies with state laws and regulations but also addresses unique business needs. Here are the key elements to include.

1. Job details and responsibilities

Every employment contract should clearly define the position and its associated duties. This helps set expectations from the start, ensuring the employee understands what the employer requires.

2. Salary and compensation details

Transparency in payment terms is crucial. Include specifics on salary, bonuses, commission structures and any other forms of compensation. Also, provide clear information on payment schedules.

3. Terms of employment

Clearly specify whether the employment is at-will or for a specific duration. If the employment is for a specific term, include the start date and end date.

4. Policies on leaves and benefits

New York law has specific requirements regarding sick leave, vacation and other benefits. Make sure to include these details in the contract, alongside any additional benefits provided by the company.

5. Confidentiality agreement

To protect proprietary information, include a confidentiality clause. This states that the employee must not disclose any business secrets or sensitive information during and after employment.

6. Non-compete agreement

A non-compete clause prevents employees from starting a competing business or working for a competitor within a certain period after leaving the company. However, ensure that any non-compete agreement is reasonable in scope and duration, following New York’s legal standards.

7. Termination terms

Establish the grounds for termination, including any notice period required. These terms should be in accordance with New York law.

8. Dispute resolution mechanism

Include a section outlining how to handle potential disputes, whether through arbitration, mediation or court proceedings.

Crafting comprehensive employment contracts is a critical step in building a new business. These contracts define the relationship between the company and its employees, helping to create a transparent and harmonious workplace.