A labor contract which is also called an employment contract is a document that defines the relationship between the employer and employee. This way they both have a clear knowledge of what they are supposed to do and what the other party requires from them. When a company hires an employee, the recruiter assumes some duties or responsibilities that the employee will perform at the job and also the employee imagines the benefits he will get on the job by the company too. This way if they don’t state their requirements and needs in front of the other one, it’s possible that soon they won’t be able to continue their journey together because of the confusions and misunderstandings. This is why the employer is required to sign a contract before he hires new staff.
Here is preview of this Free Labor Contract Template created using MS Word,
Essential elements to include in a labor contract:
- Define the position
the contract should contains a definite description about the job along with the duties and responsibilities. This way when the both parties are signing the contract, they both are aware of what the employer is offering and what the employee is accepting.
- Length of agreement
this section concludes about the time the employee will work for the employer i.e. six month, one year or five years. This makes it possible for the employee to not to keep the hopes too high and has a clear knowledge about the time when the contract will expire.
here the contract states what kind of duties and responsibilities that the employee is required to perform on the job.
here the employer provides the benefits that the employee will receive after he has got the job. For example free education of the kids, free medical for family, insurance and retirement plan.
it’s possible that after a while, the employee will decide or choose on his own without getting approval from the authority and this will cause some disputes among employee and employer. This part explains what conditions will result in his termination from the employment and what kind of decisions he is not allowed to make.
- Other specific conditions (if any)
depending upon the work environment and the company type, the employer or employee may have some additional conditions to state too. Those conditions or rules are stated here and both the parties need to approve them.
How to prepare a labor contract:
- This contract needs to be written on company letterhead or stamp paper so that both the employer and employee can use it in the court in case of any dispute.
- State the date when the contract will start and the name of the employee that is hired by the company.
- You are required to describe the job and provide the specifications about the job and its responsibilities.
- The contract should state the salary of the employee on daily, monthly and yearly basis just to make sure that both parties are on same page. If the employer is required to increase the salary after every six months, that should be stated here too.
- After that the employer should include the violations or misbehaves that can result the employee in immediate termination from the job.
- The contract must state the benefits the employee will receive and the criteria he or she needs to follow in order to get those benefits like medical, insurance or retirement plan.
- At the end, the employer and employee are needed to sign and put their thumb impressions too. The whole contract is a waste of time if any one of them is not agreeing to sign on the contract as that may result into expiry of the agreement.
Here is download link for this Labor Contract Template,
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