Does your LLC have or will it have highly compensated employees? If so it would be prudent for the LLC and the employee to enter into an Employment Agreement.  Will your LLC hire any independent contractors?  If so, it should enter into an Independent Contractor Agreement with the contractor.  The failure to document important contractors leads to disputes among the parties as to what the parties agreed to.

The primary reason to have employees and contractors sign a written agreement is because a written agreement is to prevent disputes because the terms and conditions agreed to by the parties are memorialized in the written document.  One lesson my first year contracts law professor taught me in law school is “If it’s not in writing it’s like it never existed.”  The lack of a written agreement is an invitation to disputes, disaster, litigation and attorneys’ fees.

A good written agreement with an employee or contractor does more than just state the amount of money the LLC will pay the employee or contractor. The written agreement should cover:

  • Money:  How much will one party pay the other for the services to be rendered under the contract?  Is the amount fixed or does it depend on time spent or production or some other criteria?
  • Duties: Exactly what is the employee or contractor required to do? Is it full time or part time? How is over time compensated?
  • Term: What is the term of employment or contractor services? One week, one month, one year, two years, at will?
  • Termination rights: Can either party terminate the agreement early with cause or without cause? What are the grounds for termination for cause? How much notice must be given? Will there be any severance pay?
  • Vacations: How much time? Is it paid or unpaid? How does vacation time accrue? Does unused time carry over from year to year?
  • Fringe benefits: Are there any? If so, they are detailed in the agreement.
  • Confidentiality: Is the employee or contractor prohibited from disclosing or using the LLC’s confidential information?
  • Noncompete: Is the employee or contractor prohibited from opening a competing business or working for or owning a part of a competing business?

Hire Us to Prepare an Employment Agreement or Independent Contractor Agreement

Contact KEYTLaw contracts attorney Richard C. Keyt if your LLC needs a good Arizona specific Employment Agreement or Independent Contractor Agreement. For $350, Ricky will prepare an Employment Agreement or Independent Contractor Agreement customized for your LLC and give it to you in Word format so you can modify the agreement as necessary from time to time for each particular employee or contractor. Call Ricky at 480-664-7472 or send Ricky an email message at [email protected]. The fee includes up to one hour of time discussing and customizing the agreement.