MBA1110 Q&A Wednesday: How do I write employee contracts?

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Today's question is from Kenny and Kenny asks, how do I write employee contracts? A really solid question, Kenny. It's very practical, something that we all have to do when we hire somebody new. And to be quite honest, this was a huge hurdle and struggle for me. When I first got started and started growing my team, I didn't know how to do this. Luckily I figured it out and I'll be able to share with you the best way and the most affordable way to write. Of course I am not a lawyer and when it comes to legal contracts you should consult with a lawyer. You're going to hear me say this over and over throughout today's episode because it's solid advice. We have a Business attorney, and he's fantastic. And I've said this before, it can cost you a whole lot more to not have an attorney than to have one. But in today's episode, what you're going to learn is you can write the contract yourself, easily, actually, and save a whole lot of money, because all you're going to get your lawyer to do is help you review it and, and approve it. We'll get into all the details in today's episode. So let's get into it. Let's get down to business. So Kenny asked today on Q and A Wednesday, how do I write employee contracts? Now, every employee is going to have a different position, different salary, different requirements, maybe different probation periods, things like that. But most of an employee contract has to do with your company policy and really just protecting your business from any kind of legal action. And it's pretty standard with all your contracts. You're going to change some of the variables because of, again, different position, different kind of salary, maybe in different incentives if they're a sales employee. But for the most part, once you nail this, you're going to be able to adjust it to every new employee. So how do you get started? How do you actually write this thing? Most of us are not lawyers. We haven't been trained to write legal documents. Well, let me give you an amazing resource that I found that has helped us tremendously. It's called Law Trades. If you go to law trades.com and go to the Resources tab, you're going to see a bunch of templates that you can use. Many of them are contracts. They have employment contracts, they have even consulting contracts, things like that. Now let me tell you what you're going to do with these templates. So in these templates, they have all the legal information in there. You're going to change the variables, the things that are applicable to your business and the position and of course, the employee. The other thing you're going to do is you're going to have to read through the contract word for word, many times over. Once you've changed things up and edited it, you want to make sure that it is applicable to your business, that there's no kind of parts or phrases that have nothing to do with your business. And what I love about these templates is that they're simple but comprehensive. This helps you get the ball rolling. This is what I love about it because it kind of just gets you started and allows you to know what you need to include in a contract where you just fill in the blanks, fill in the information that you will know because you're the business owner. So again, you're gonna complete the template, make sure all the relevant information's in there, and you're gonna read it through several times. I recommend you read it three times, and you take a break each time you read it. And I mean, like a longer, extended break, like a few hours if you can, maybe a day. It's good to come at it at fresh eyes. Now, once you finished the template and reviewed it three times, I would get a lawyer to look through it, make sure that you are covered, that your contract is solid. Now, the great thing about lawtrades.com is that you can get a free consult and they can really help you out and hook you up with a lawyer to look over your contract at a minimal fee. We're talking about maybe a couple hundred dollars. Now, if you're hiring somebody in your company, a couple hundred dollars to review your contract is very, very reasonable. And of course, it's an expense and tax deductible for your business. Now, Law Trades is not sponsoring today's episode or anything like that. It's just a great resource that I wanted to share with you because it's helped us so much. Now we have our own business lawyer, but you can find your own business lawyer through Law Trades. If you're wondering how can I get my lawyer through that free consult I just mentioned. Now, when you do speak to your lawyer, you want to let them know what you're doing. Let them know that, hey, this is your first contract. If it's your first contract, and say, hey, I want to make sure that I can grow with this contract. Meaning you don't want to have to hit up this lawyer every single time. You want to see if they can format the contract so that you can just fill in the blanks and change up, you know, the name of the employee, the salary, all that kind of stuff. Most of the time, your company policies, days off, holidays, things like that, maternity leave, all that stuff in the contract remains the same and doesn't change from one employee to the next. But since you're sitting down with a lawyer, tell them, hey, I want to be able to use this contract over and over again with different employees. So maybe can you format it so I can just go to one area, one box in the contract where I can just adjust this information? And of course, you could do this through a Google Doc or a Word Doc, and then save it as a PDF. And that's what we do. We save it as a PDF and then we send it to the employee before they get started with us in our company. They review the contract and they sign and date it and they can do it electronically and send it to you, or they can physically do it and then take a picture of it and send it to us. And now it's a legally binding contract and you could save it in your own files. And if you like, if you are going to be working with your lawyer as a long term type of relationship, you can send them a copy for the reference. So as you can see, this is pretty simple and you're going to get a lot of bang for your buck when you meet with your lawyer because you're going to be able to use this contract over and over. Now, what are some things, some key things I would include in every contract, especially if we're getting started in your company? Number one is a probation period. We include a probation period in all our contracts, which stipulates, hey, within the first three months of your employment, your employment can be terminated at any time and you can leave at any time. It's like a two way street. So why do we do this? Because it takes about three months for us to know for sure that this person's solid and we want them on the team long term. But let's say, for example, within the first month they realize this person can't even wake up on time. They can't even do the job. They're not, you know, skillful enough or maybe they're just abusing your system. At that point you don't want to waste time, you don't have to give notice or waste any more money. You should be able to just let them go. And the contract, if it stipulates that, that's fine. Of course you got to consult with your lawyer and make sure this is legal in where you live, just like we have. Okay? So make sure you do that. Of course you have to consult with your lawyer and make sure this is legal in where you operate as a business. But in most scenarios when both parties are agreeing to it, that's totally fine, that they can leave at any time and you can terminate their employment any time. And once they're past their three month probation, then there's a different term and that's in the contract where it says, hey, they need to give X amount of notice. Let's say they have to give, you know, two weeks notice and you have to do the same. What else do you want to include in your contract? Well, you want to make sure that they Understand how their leave works, how many days they have off, what happens if they don't use your leave? What when happens? What about public holidays? Make sure they understand what they get, what their benefits are and how to use them. Also, in your contract, you may want to use a non compete clause. So what does that mean? A non compete clause is basically when somebody works for you and then they leave your company. It stipulates in the contract they can't work for somebody else for a period of time that's considered a competitor of yours. Usually it's a year. So basically, if somebody leaves your company, they can't leave you for a competitor. So why do companies do this? Well, because they invest a lot of money and time and effort in training the employee and getting them, you know, to a level of competency. And then if they leave and take all that investment and give it to their competition, it kind of seems a bit unfair. So a lot of people say at least one year grace period where you can't go to a competitor. This also helps companies prevent poaching, meaning that, you know, some people love your product and they look at the people that are working at your business and say, hey, I would love to approach that lead developer or approach that designer or that customer service manager and I'll give them a nice offer. And if there's no non compete clause, then it's fair game. They can just poach and grab that great superstar employee of yours and bring them over to their company and they'll have an advantage.

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All right, let's wrap this up. What do you got to do? Let's start with a template. So you're going to go to lawtrades.com and download a template for your contract. You're going to, you know, adjust the template, you know, modify it, edit it for your needs. Once you do that, you're going to review it, read it word for word three times with breaks in between. Once you do that, you're going to reach out to a lawyer and get them to review it and customize it so that you can be able to reuse that contract for every new employee for every new position. If you don't have a lawyer ready, Law Trades offers a free consult and you can have a pretty affordable law consultancy and speak to a lawyer to help you out. You're also going to consider some of the things we talked about. What are some things you want to add to the contract to make sure it's suitable for your company? Well, there you have it, guys. I hope that helped and hope that helps you. Kenny, who asked today's Q and A, Wednesday's question again, if you have a question you want to ask, just email me@omar mba.net Would love to answer your question right here on the show. That's it for me today, guys. Before I go, I want to leave you with this, some of this legal stuff, contracts and all that stuff. It's boring. It's not the fun part of business. It's not the, you know, the launches and the sal and the marketing and the innovation. But it has to get done. You gotta do it right so your business can sustain itself. It's like eating right, right? It's something you have to do. So just do it and get it done with. I like to do these things at the top of my to do list. I like to do them at the start of the day so they're done. I don't have to think about them anymore. Don't procrastinate when it comes to the legal stuff in your business. All right, thank you so much. I'll check you in tomorrow's episode. I'll see you then. Take.

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