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Does Your Bar or Restaurant Need an Employment Agreement?

F. Michael Ayaz

When you are in the process of getting your Santa Ana bar or restaurant off the ground, you need to make hundreds of important decisions. The employees you hire are likely some of the most important decisions you will make, as everyone from your manager to your chef to your waiters, bartenders, bussers and more will contribute to the success of your new business.

However, in the midst of such a busy time, many California bar and restaurant owners can overlook an important part of the hiring process: the employment contract or agreement. An employment agreement benefits both the employer and the employee by laying out clear terms for the employment relationship. While hiring employees via an oral or handshake agreement may seem convenient, it can be difficult to enforce in a future conflict. What do you need to know about employment agreements?

What to include in an employment agreement

According to The Street, below are several basic terms or issues to address in an employment agreement:

  • Salary and benefits. Detail the employee’s salary, including the potential for bonuses, as well as employer-provided benefits like health insurance, paid time off, retirement plans or more.
  • Duties and responsibilities. List the specific responsibilities that you expect the employee to concentrate on and regularly carry out.
  • Probationary period. This can detail the period, typically 90 days, in which you may still terminate the employee at your own discretion.
  • Termination. This can describe both how you may terminate the employee and the process for the employee to quit, including by providing sufficient notice.

You may also address other issues pertinent to the success of your business, including performance reviews, protections against the spread of confidential information and more.

Advantages for employers

One of the key benefits of employment agreements or contracts is the avoidance of uncertainty for both parties. In the event of a future conflict, both the employment agreement and company policies can provide clarity and guidance on disputed issues. You can also set clear expectations early on for the terms of the employer-employee relationship.

A carefully crafted employment agreement can provide both employers and employees with certain protections from the start of the employment. Work with an attorney to compose a sound agreement that reflects the needs of your growing business.

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