Employment Contract Attorneys
As seasoned Employment contract Attorneys we know that these contracts are not one size fits all. Your company may need several different types of contracts to cover hourly non-exempt employees, salaried employees, seasonal employees, and corporate officers. The terms of each of these may vary in several key respects. Also, while hourly employees’ agreements may be more standardized, executives and high-level salaried employees will likely want to negotiate more of the terms.
Employment contracts are not one size fits all.
As seasoned Employment contract Attorneys we know that these contracts are not one size fits all. Your company may need several different types of contracts to cover your employees. An hourly non-exempt employee, salaried employee, seasonal employee, or a corporate officer, we can help draft these contracts. The terms of each of these may vary in several key respects. Also, while hourly employees’ agreements may be more standardized, executives and high-level salaried employees will likely want to negotiate more of the terms.
California is an “at will” state.
It is important to keep in mind that in California, all employees are “at will” unless a written agreement states otherwise. Employers may terminate “at will” employees without having to show cause. An employer may let an “at will” employee go for any reason or no reason at all. As long as there is no discrimination based on protected categories like race, gender, etc. involved in the firing,
If your employment contract sets a specific term of employment – three months, one year, five years – courts may interpret the contract as guaranteeing employment for that period of time. In that circumstance, you may need to show the employee was fired for cause. What counts as good cause for firing may also depend on the terms of the agreement.
In general, your employment contract should include the amounts of all types of compensation. Whether the employee earns an hourly wage, salary, bonuses, incentives, or commissions. It should also include the nature of the work expected. If the employee is hourly, your contract should state whether the employment is full-time, part-time. You should also include if there is a range of time they are expected to work (for example, “30 hours a week or less,” “40-50 hours a week”). Also include the types and/or amounts of work-related expenses you will (or will not) reimburse.
Contract Should Include
The contract should also include any benefits your company provides, such as health insurance, life insurance, disability, paid vacation, 401k, etc. If your company matches 401k contributions, in whole or in part, include that also. Include whether you offer paid vacation time and how much. Also include whether your company offers or contributes to health insurance premiums, and how much will the employee pay. Including these specifics in your employment contracts can avoid misunderstandings once the employee begins work.
You’ll want to protect your companies confidential information, include a confidentiality provisions in the employment agreement. You should also have a separate confidentiality or non-disclosure agreement. We can assist you in creating non-disclosure provisions (or a separate agreement) tailored to the specific types of information you want to protect, including trade secrets.
Under California’s Uniform Trade Secrets Act, a “trade secret” is “information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” (Cal. Civ. Code section 3426.1(d).)
We can help you draft provisions to protect any important proprietary information, including client lists and business practices that may not meet the definition of “trade secrets.” It is also advisable to include in your employment contracts an arbitration provision and class action waiver. Whether you are based in California or elsewhere, if you want your state’s law to apply to any employment disputes, you should also include a choice-of-law provision in the agreement.
You may also want to include other provisions in your company’s employment agreement that apply to specific types of employees:
Non-Exempt, Hourly-Paid Employees
There are laws and regulations regarding information that new employees must be provided at the time of their hire. These items are discussed here
Many companies now hire a majority of their hourly employees on a part-time basis, to control costs associated with employees who work over 40 hours a week and earn benefits. If you intend for an employee to be part-time, but that employee also has the opportunity to pick up extra shifts or hours, you may wish to require the employee to notify a supervisor if their total hours approach 40 per week.
Salaried “Exempt” Employees
A salaried employee may be “exempt” from many of the California Labor Code’s wage and hour laws. To be considered exempt, salaried employees must be paid at least double the minimum wage for a full-time (40-hour-a-week) employee. They must also perform “white collar” work. Examples of this include professional, clerical, administrative or executive duties. Salaried employees must also be allowed to exercise independent judgment in their work.
However, these are not the only rules, as the laws and regulations vary by industry. We can assist you in determining whether your salaried employees are considered “exempt” under California law. If an employee is truly “exempt,” this should be included in the employment agreement.
You may also want to include other provisions defining a salaried employee’s responsibilities to your company. Because exempt employees are not paid overtime like non-exempt, hourly employees, your employment contract should include a “best efforts” provision. This would mean that the salaried employee must exert his or her “best efforts” in performing his or her work for the company.
You will need to negotiate individualized employment agreements for company officers and other executive-level employees. Executives will likely not serve “at will,” and the circumstances under which they can be let go will need to be clearly defined. Likewise, most executive-level employees will want a guaranteed severance in the event their employment is terminated.
Like other salaried, exempt employees, executives should be bound by a requirement that they give the company their “best efforts.” The scope of their duties and responsibilities should also be clearly listed.
Corporate officers act as agents and representatives of the company, and as such, owe fiduciary duties, which should be set out in the agreement. Likewise, if your company carries D&O (Directors & Officers) liability insurance, you should inform your executive officers of the nature of the coverage, either in the employment agreement or in a separate document.
You may decide to grant your officers and executives stock options. This can be referenced in the employment agreement, but it is also good practice to have a separate agreement addressing stock options. Of course, if you handle executive hiring for a publicly-traded corporation, a host of other securities laws and regulations apply.
Our expert employment contract attorneys can help you craft employment agreements to match your company’s needs.
Regardless of whether you are just starting a brand new company, run a ‘mom & pop’ business, or you already have a large established corporate enterprise with hundreds of locations across California, we are able to grow with you and meet your legal needs.