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18+ Sample Work Contract Templates
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What Is a Work Contract?
According to an article from HG.org, business contracts are important in any business transaction. This does not only entail that the agreement between two parties is legally binding, but it can also serve as references that can protect the company if you wish to do business with someone. Whether for building a project, or merely hiring an employee, a written contract that outlines essential work information is necessary. To define it in a simpler way, a work contract is a written agreement between an employer and employee that presents terms and conditions that both parties have mutually agreed upon.
This type of contract also lays out details about services and compensation processes. With this, the agreement between two parties will be legal and clear. According to the report from Statista, there are 157.54 employed people in the United States as of 2019. However, Statista also shows that the state of California has the highest employed people with 18, 627 thousands of the same year. On the other hand, the employment rate of the United States in 2019 is 60.8 percent, based on Statista figures.
The Basic Elements in a Work Contract
A work contract is an essential written document that presents the work agreement between two parties. This type of business agreement must include essential information that will justify its purpose. Here are the basic elements that need to be included in a work contract.
The Benefits of a Work Contract
Based on an article from Forbes, written contracts are important, especially when an employer is engaging with an independent worker. Business work contracts are necessary documents that establish strong employer-employee work relationships. Besides that, work contracts are also beneficial for both parties. Here are some examples of the benefits of having a work contract.
How to Write a Formal Work Contract
Once your business grows, many opportunities will come your way. And, opportunities mean more work, so hiring new roles will be essential. But, before an employee can start working with you, you need to set forth and discuss essential details about the job first through a formal document. So, if you are about to work with another party, you need to have an informative and professionally written work contract. However, if you do not have any idea how to make one, you can grab our sample templates above as a reference and follow the tips below.
Step 1: Input Basic Information and Introduction
Begin drafting the work contract explaining what the contract is about and who are the parties involved. In this, you need to provide basic information about your company and the employee. The introduction usually goes like this, “This contract is made between John Doe (employer name or company name) and Jane Doe (the person or soon-to-be official employee). It should also contain the complete date when the contract is made. The work contract should also explain the term of the contract.
Step 2: Describe the Work
After writing an introduction, the next thing you need to place is the work scope. In this section, you have to describe what type of work the employee is required to do. It is essential to provide enough information about work-related duties, including other responsibilities. For example, if you are hiring a general contractor for a construction project, you have to outline the contractor’s job inside and outside of the project. Nevertheless, make sure that the scope of work and services are well-defined and clearly stated.
Step 3: Write the Payment Process
Once you have already placed the work scope, it is time to write the payment structure. In this part of the work contract, payment processes like how often the employee will get paid, how the payment is calculated, etc. It is also necessary to outline the benefits the employee will receive, such as medical, eye care, dental, and more. It should also be clear what percent the employer will pay for the benefit plan.
Step 4: Include a Confidentiality Clause
Now that you have already explained the payment process, you will add a confidentiality clause in the work contract. This section should include terms regarding company asset and company-based documents. The confidentiality agreement is necessary because it will protect your company’s resources and client data. It should also be essential to explain the conditions that are grounds for contract termination.
Step 6: Get the Contract Signed
Once every necessary information is written in the work contract, finalize it by getting it signed. Before that, make sure to evaluate the work contract and see if there are errors that need to be corrected. Ensure that both parties, the employer and the employee, will read the contract before signing it. This is to make sure that both parties have understood what the contract implies. Signing the contract legalizes everything written in the contract, which ensures there will be no misunderstandings in the future.
Are work contracts legally binding?
Yes. An employment work contract is a legally binding contract because it is valid under federal contract laws.
What makes a good work contract?
A work contract should be detailed and consist of essential information that explains the employment agreement between two or more parties. A good work contract should be understandable, informative, and formal.
Is a work contract necessary?
If you are in a business transaction with someone and you want to legalize your agreement, then yes, having a work contract is necessary. With a work contract, you will be able to secure both of your rights and avoid problems in the future.
What is the minimum contract term?
The term of the contract depends on what the contract is about. For example, if the contract is for a project, the contract will last until the project is done. Nevertheless, the extension of agreements is possible.
What are the three types of employment contracts?
The three main types of employment contracts are the permanent employment contract, fixed-term contract, and the casual employment contract.
Work contracts are essential in every business transaction, just like any other kind of business contract. This legal document makes the work agreement between two parties, the employer and the employee, and ensures that both parties will follow each term. The work contract also imposes security for the people involved, as well as protects their rights. So whether you are working with a contractor or a newly hired employee, it is always essential to legalize every agreement through a work service contract.