The hiring of consultants, contractors, or remote workers is becoming increasingly relevant in the workforce. Companies are finding this employment option more attractive because there are many advantages to hiring contract employees opposed to a full-time employee. Mainly, there is a long term cost savings, as is it not required to provide benefits, such as insurance or paid-vacation, to contract workers as it is to full-time permanent employees. Another advantage includes the ability to rotate, change or remove the contracted worker if you are unsatisfied with their completed work.
Though this temporary employee is not gaining permanent work, a contract that details the length, description, and pay is required. It can be difficult to differentiate what should be included and excluded from a non-permanent employee contract compared to a permanent employee contract and what additional terms need to be noted.
The following are six key factors that need to be included in a temporary employment contract.
1. Length of Employment
With a permanent employment contract, the length of employment is not stated as it is assumed that the employee is hired for an indefinite amount of time. However, with a temporary contract, it is crucial to state the initial length of employment so term such as deadlines and payment can be arranged within that stated time period. The length of employment can be adjusted at any time after the contract has been signed if agreed upon by both parties.
2. Pay – hourly wage and overtime wage (if applicable)
For temporary employees, an hourly wage opposed to an annual salary is most often stated. In this section of the contract, items such as overtime or sick pay need to be clearly established. If overtime pay is not available for your contracted employee, they are not required to complete more than the predetermined hours.
3. Job Description
Along with the length of the employment, a detailed job description needs to be clearly defined for that stated time period. As the contracted employee is not receiving benefits or full time compensation, they are able to reject tasks that are not in the scope of their job description. This section of the contract may also include a specific set of tasks with corresponding deadlines.
4. Terms of Early Termination
In most cases, an employer has the right to terminate employment of a temporary worker with little or no notice. To avoid future legal issues, clearly state your termination clauses, with or without reasoning.
5. Statement of No Special Consideration for Permanent Availability
Many workers accept a temporary position with the aspiration for it to lead to a permanent position. Though this may be possible, it is important to state within the contract that a temporary employee will not be under special consideration for a permanent opportunity and must compete with all other applicants.
6. Level of Security Clearance to Internal Information
A risk involved with hiring an external, temporary worker is that they will become exposed to potentially sensitive company information. In order to protect your company after the length of the contract, initially state the level of information the employee is privy to.
Before signing your proposed contract and hiring a non-permanent worker, be sure to review all terms and clauses with your lawyer. You want to ensure that the contract highlights the non-permanent status of the employee and includes all details required for the termination or expiration of the contract.
If all clauses in the contract are validated by an employment lawyer, and accepted by the employee, your company can greatly benefit from a temporary or contract worker.
