The Importance of Employment Law & Why It Matters

Their importance cannot be overstated – employment (or labor) laws provide the foundation for our economic system! Over the years they have grown to reflect the values we hold as a society and in our ideal of the equality of all people. When a business violates a law there can be devastating consequences through governmental fines and legal actions, so it is crucial that businesses include best practices to ensure the well being of the company and its employees.

A simple yet effective way to achieve a best practices model is with four documents: The Offer Letter, Employment Agreement, Employee Handbook and, when needed, the Termination Letter. Each of these documents, when followed in this order provide the best protection for the employer/employee relationship.

Employee Offer Letter

The first step in a new employer/employee arrangement is to begin with an Offer Letter. While there’s no legal requirement to provide an offer letter, it does have important legal significance and is the starting point for negotiations. Job responsibilities, relevant details of the company, conditions (background checks, drug testing, etc.) salary and benefits are contained in this document and are often a starting off point in negotiations.

Employment Agreement

The Offer Letter can be so detailed that sometimes it may be all that you need to provide the employee, often when the position is a lower-level role. But in more high level positions, a signed Employment Agreement is essentials.  Employment Agreements are often-overlooked step but not including this powerful document in your company’s hiring process can be a terrible mistake. 

The Employment Agreement is a legally binding document which is designed to provide security and protection to both parties. Wages, benefits, termination procedures, non- disclosure, intellectual property protection, and non-solicitation of clients,  are routinely included in this document. It is a great way to begin a positive working relationship because of the structure, security and stability it provides.    

Employee Handbook

Among the best protections for employers is the use your Employee Handbook. If well written, this is an incredibly valuable tool to educate employees on the proper procedures, values and expectations that the company has. It also informs them of their rights and responsibilities as employees. The Employee Handbook should be considered a living document – one that is regularly reviewed, revised and grows as the business evolves. The Employee Handbook serves as the first place HR goes when it’s time to fire an employee for cause, such a competing with your company, among many other actions that employees may take to the detriment of your company.

Termination Letter

The final document, the Termination Letter, contains several important pieces of information which employers must be careful to word correctly. The termination date and the reason for termination are key elements. Also included may be reminders of confidentiality, request for return of equipment, compensation and an outline of what will happen to their benefits. Ending a work relationship can be a difficult and sensitive event and the termination letter provides a clear path towards resolving any outstanding issues.

Get Your Employment Practices Buttoned Up

Mid-size business often don’t have employee handbooks that truly protect them, but to become a well-oiled business positioned for growth. An Employment laws are the legal rights, requirements and protections for employers and employees. Documentation in the form of Offer Letters, Agreement Letters, Employee Handbooks and Termination Letters is the surest framework to proceed in any step in the employer/employee relationship.

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