Tag Archives: employment

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Essentials for Employment Contracts

When your business is ready to hire employees, it is essential to get legal help. An employment contract can be used to outline the legal relationship between your entity and your employees so there is no confusion regarding the rights and duties of the parties. Having an agreement in writing can help your business avoid misunderstandings and litigation in the future.

An employment contract should be drafted to meet your business’s specific needs and the job position covered in the agreement, but below are a few factors to consider:

  • The contract should set forth all information regarding how the employee will be paid, including salary, hourly wages, commissions and bonuses.
  • The hours the employee is expected to work should be defined, as well as whether the worker is expected to perform his or her job duties in the office or if he or she has the ability to work remotely.
  • If your business intends to grant equity in the company to attract employees, the terms should be detailed in the employee contract. This includes addressing topics such as the type of stock grant, exercise price, options for acceleration and vesting term.
  • Any benefits that will be provided to your employees should be covered in the agreement. Examples of benefits to address are 401k or pension programs, health insurance, vacation and sick leave, maternity or paternity leave and other similar perks of the job. The contract should specifically discuss any requirements that must be met before the benefits can be exercised.
  • You should have your employee sign a non-disclosure agreement (NDA). This could be a stand alone agreement, or it could be made a part of the employment contract. It is important to describe what must be kept confidential, as well as the consequences of violating the NDA provisions.
  • In most situations, you will want the contract to specify that the employment is “at will.” Otherwise, you should clearly set forth the term of employment. Additionally, the grounds for termination should be outlined and if compensation will be paid upon termination.
  • If your business is in a competitive industry, you may want to consider including a covenant not to compete for a certain period of time after the employee stops working for you. However, since the courts do not favor restraining an individual’s ability to work, you should obtain legal counsel in drafting these provisions and to determine if they are enforceable in your state. For example, California holds non-competition agreements to be unenforceable.

To ensure that your employment contract provides you with the most protection from liability available, contact Leslie S. Marell to schedule an appointment. Our office is located in Torrance, California, but we proudly serve businesses of all sizes from all over the country.

 

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How a Business Attorney Increases Your Bottom Line

All business owners look for ways to cut costs and save money. You may think that handling legal issues on your own will save your entity money, but working with a business lawyer to safeguard your business’s best interests will save you in the long-run. For example:

  • Legal structure. Having an attorney help you pick the most advantageous legal entity for your business is one of the most important things you can do. There are a variety of entity types available and each has its own pros and cons. Choosing the right legal structure for your business impacts your personal exposure to liability and taxes.
  • Transactions. Contracts can be complex and extremely difficult to understand. Negotiating the best deal for your entity can feel overwhelming, especially if the other party has their own attorney. Working with your own business attorney can ensure that all negotiations are handled fairly and that the contract is drafted in a way that unambiguously reflects what the agreement was. A seasoned lawyer can also anticipate certain obstacles and take action to decrease your potential liability as well as reduce the likelihood of any disputes going through costly and time-consuming litigation.
  • Employment practices. Before your entity hires its first employee, you should confer with a lawyer. It is essential that employers verify that their employment practices (such as hiring/firing employees, providing benefits, classifying employees versus independent contractors, and other similar matters) comply with federal and state laws. Failure to do so can result in your business being sued or being assessed penalties by the government.
  • Lease agreements. Leasing commercial space is often a commitment that lasts for a long period of time. Leases often cover numerous complicated matters, so it is essential that you understand what you are agreeing to before you sign the contract. Failure to confer with a lawyer regarding a commercial lease could lock your entity into an agreement with over-reaching or unfair terms that can negatively affect your business’s chance of succeeding.

The above list is not exhaustive, but it gives you an idea of how a business attorney can save you time and money. To learn more about starting a new business or how we can assist you with other business-related matters, contact Leslie S. Marell today.