There are some essential agreements that you need to have while hiring employees. These agreements cover factors like the terms and conditions of employment, responsibilities and expectations and prevent legal disputes. Here are four essential agreements that every company needs:

Employment Contract

An employment agreement is a legally binding document between an employer and an employee. Employment agreements are important because they prevent disputes and promote compliance with labour laws. Key components of an employment contract include:

• Job Title and Description: Clearly outlines the role.
• Payments and incentives: Salary, wage, bonuses, etc.
• Benefits: Health insurance, retirement plans, etc.
• Duration: Permanent, fixed-term or temporary.
• Work Hours and Location: Work hours and where you’ll be working.
• Termination: Details of how the contract can be terminated.
• Dispute Resolution: How to resolve disputes.
• Signature: The signature of both the parties.
• Date: Date of the contract.

Non-Disclosure Agreement (NDA)

NDAs also known as confidentiality agreements are essential to protect business secrets. These agreements ensure that employees, partners or other stakeholders do not release confidential information to third parties. This is mainly used to protect trade secrets and intellectual property. Key elements of an NDA include:

• Parties Involved: It states the list of all the individuals and entities involved in the non-disclosure agreement.
• Confidential Information: This states what information is protected by the NDA.
• Time frame: It specifies the duration of the confidentiality agreement. 
• Purpose of disclosure: NDA states situations or circumstances where the confidential information can be shared.
• Remedies of breach: This section states the action that will taken against the breach of contract. It can be legal actions as well as financial penalties.

Intellectual Property (IP) Agreement

An IP Agreement ensures the company owns any intellectual property employees create during their employment. This document is very important in industries where innovation and ideas are key. The key components of an IP agreement are:

• Ownership of IP: Every IP agreement has a common claw stating that any IP created by the employee belongs to the company.
• Assigning IP rights: It makes sure that the employee agrees to assign any IP rights to the company including inventions, designs and written works.
• Disclosure Obligations: Employees are obligated to disclose any inventions or creations relevant to the company’s business.
• Protection of Company IP: Stating the employee’s responsibilities to protect the company’s existing IP.

Non-Compete Agreement

This agreement is used to restrict an employee from joining a competitor company or from starting a competing business after they leave the company. The following points should be noted while drafting this agreement:

• Scope of Restriction: Defining the geographical area and industry the employee is restricted from working in.
• Duration of Restriction: The time duration of the non-compete period.
• Reason for the Restriction: Providing a reason for the non-compete. It makes it fair and justified.
• Enforceability: Make sure that the No-compete agreement is according to the local law and not overly restrictive.