Employment contracts don’t always make sense. Typically, employment contracts are only used for executives, but they could be especially useful for the construction industry. Having an employment contract could mean all the difference for maintaining a robust workforce in the face of major construction labor shortages. According to the Home Builders Institute, the shortage reached crisis level in late 2021 at an average of 300,000 to 400,000 open construction sector jobs a month. An employment contract can protect your company and what you’ve invested in your employees. Consider how much you’ve spent recruiting, hiring and training a new employee. You don’t want the competition to benefit from your hard work if said employee jumps ship right when you’ve got them up to speed.

What is an Employment Contract?

It’s important to note that an employment contract is NOT an offer letter. An offer letter is a document typically emailed to a candidate offering them a job and other basic information, e.g., start date, title, salary and onboarding information. But even at the point of offer letter receipt, the job offer isn’t necessarily set in stone. Many companies set contingencies before employment begins, like a completed background check or drug screening, especially construction companies where workers operate heavy machinery.

An employment contract is a signed agreement between an employee and employer or labor union. It establishes the rights and responsibilities of both parties. Where an offer letter can be vague about future statements, an employee contract puts them front and center.

Details to consider about an employment contract include:

  • It is a legally binding contract between employer and employee
  • It includes specific details about employment
  • It may make specific stipulations on employment conditions that differ from “at will”
  • Employers and employees cannot break the contract without consequences
  • It promises employment for a set amount of time and set wages

Because employment contracts protect both employers and employees, they’re useful in industries that require specialized skills, like construction. Construction employers and employees spend time and money obtaining certifications and completing training. An employment contract protects both parties and their investments.

Best Practices for Employment Contracts in Construction

While having employment contracts in construction might be a good idea, there are some things that could be considered when drafting them. The purpose behind employment contracts is to clearly define the role and responsibilities of both the construction employer and employee. A written employment contract is just that: a contract that must be upheld by all parties. Breaking the contract could lead to legal consequences.

Don’t forget to add essential clauses.

An employment contract should include salary information but also clauses about the duration of employment, especially when dealing with union contracts, confidentiality, future competition like noncompete agreements and ownership agreements. Ownership agreements may apply to the employer owning any work-related materials produced by the employee, or perhaps communication devices and/or work equipment.

Clearly define responsibilities and benefits.

One of the biggest benefits to an employment contract is that it doesn’t leave any wiggle room for interpretation about pay benefits, length of employment or even what happens if the contract is broken. Make sure your employment contracts are drafted with this in mind, laying out responsibilities in print so all parties involved – employees and employers – are protected.

Check and double-check. 

Once a contract is signed, there’s no going back. The stipulations written in must be met. Because an employee contract is binding, there are legal consequences for breaking the terms, on both sides. Make sure everything you want included about the working relationship of your construction employee(s) is included in the contract and anything you don’t want, isn’t.

Get legal advice. 

Because an employment contract is a legal document, you should have a legal professional review it before you send it to your construction employees. A legal service, like ExakTime’s partner myHRcounsel, can provide on-demand legal and compliance services, ensuring your employee contract is accurate and binding.

ExakTime is proud to partner with myHRcounsel to help protect our customers’ employees and the success of their companies. myHRcounsel offers affordable peace of mind with access to 24-7, on-demand legal assistance from HR and employment law specialists for your specific state. It can be added to your Arcoro software subscription. 

myHRcounsel has plans specifically for construction like unlimited access to construction law documents and templates and lien and bond legal consultation. Arcoro’s software helps busy HR teams with essential workforce tracking for EEOC, OFCCP and other regulatory boards. Our partner, myHRcounsel, can provide another layer of protection.