Employment Agreement

Everything you need to know about getting an Employment Agreement on Goodlawyer: complexity tiered pricing, scope of work, why you need it, and frequently asked questions.

  1. What is an Employment Agreement?
  2. Who is it for?
  3. Pricing and Scope
  4. Process
  5. Why does my business need Employment Agreements?
  6. What risks will this protect my business from?
  7. Frequently Asked Questions
  8. Book an Employment Agreement

 


What is an Employment Agreement?

Employment Agreements govern the relationship between an employer and an employee. Good Employment Agreements clearly document the most important aspects of the relationship without unduly constraining either party. 

At a minimum, your Employment Agreements should outline an employee’s position and duties, the number of hours the employee is expected to work, and how the employee is compensated.

Depending on the nature of your business or an employee’s duties, experience, or value, your Employment Agreements may require provisions governing confidential information, Intellectual Property (IP) ownership, or bonuses, among other things. 

Who is this service for?

This service is for business owners who are preparing to hire a new employee. How exciting! Our Basic Employment Agreement is suitable for standard employees with straightforward compensation structures, and the Complex Employment Agreement is suitable for high-level employees with more complex compensation structures.

Pricing and Scope

Employment relationships can vary drastically, which means the complexity of the Employment Agreements and therefore the price varies as well. At Goodlawyer, part of our mission is to always provide upfront fixed prices for legal services, so we've created a basic and complex Employment Agreement to give business owners more choice and more control.

 

Basic ($480 + Tax)

$400 legal fee + $80 service fee

Suitable for:

  • Standard employees with straightforward compensation structures.

Includes:

  1. Client intake meeting 
  2. Description of the employment position
    1. Hours of work/schedule;
    2. Maximum hours of work & minimum rest period, potential for excess hours agreement, minimum call-in pay, scheduling limits, overtime pay thresholds/overtime averaging agreement;
    3. Work location. 
  3. Standard termination and resignation clauses (including termination with and without cause)
    1. Minimum standards entitlements;
    2. Termination during probation period.
  4. Compensation
    1. Cash-based (salary/wage), including amount paid, currency, frequency, form of payment, authorized deductions;
    2. Vacation conforming with minimum statutory requirements.
  5. Inclusion of certain low to medium complexity client-specific provisions
    1. Some examples include:
      1. Confidentiality provisions;
      2. Standard IP assignment to an employer.
  6. One round of minor revisions. 

Where customization efforts exceed the "basic" threshold, the Employment Agreement moves to the Complex tier outlined below.

Complex ($960 + Tax)

$800 legal fee + $160 service fee

Suitable for:

  • Mature companies
  • Executive employees
  • High-earning employees
  • Commission based/alternative compensation structures. 

Includes all service elements from the Basic tier. The inclusion of any of the below criteria will make your Employment Agreement “complex”:

  1. Tailored termination provisions
    1. Notice formula;
    2. Termination entitlements beyond minimum standards.
  2. Layoff provisions
    1. Includes simple (provides for layoffs in accordance with minimum standards) and more complex versions.
  3. Non-compete / non-solicit provisions
  4. Customized compensation structure
    1. Tailored vacation provisions (e.g. vacation carry over, exclusions from calculations, etc.);
    2. Bonus provisions (e.g. short term/long term incentive plans, completion bonuses, retention bonuses, non-discretionary bonuses);
    3. Commission compensation.
  5. Inclusion of certain medium to high complexity client specific customized provisions
    1. Some examples include:
      1. Conditional employment offer (probationary period, subject to background check, etc.);
      2. Participation in an employee benefit plan;
      3. Training cost repayment agreement;
      4. Simple bonuses (discretionary spot bonuses);
      5. Car allowance, cell phone/technology allowance
      6. Professional fee payment/reimbursement;
      7. Gym/club memberships;
      8. Employee discounts;
      9. Relocation expense entitlement;
      10. Other expense reimbursements;
      11. Arbitration/dispute resolution clauses.

Where customization efforts exceed the “complex” threshold, a custom price quotation is suitable. Where customization requires the lawyer to prepare a new employment policy (e.g. overtime, expenses, vacation, car allowance, etc.) the service is suitable for a custom price quote. Your lawyer will always seek your approval on custom quotes before proceeding — no surprises.

Other Considerations

  • As an early-stage co-founder, consider our Startup Bundle and save $1,280. This bundle includes a complex tiered Employment Agreement, complex tiered Shareholder Agreement, Incorporation, and 1 year of Goodlawyer Pro. 
    • See what's included in our complex tiered Shareholder Agreement here
  • If you are already using an Employment Agreement but want to ensure it’s meeting your business’s needs? Book a contract review with a Goodlawyer at $25 per page to have your Employment Agreement assessed.
 

 

What is the process?

  1. Book a call: Pick a time to discuss your Employment Agreement with a Good Lawyer. They'll help you determine if you need a Basic or Complex agreement.
  2. Design your Agreement: You’ll have a call with your Good Lawyer to help them understand your business so they can draft an Employment Agreement that adequately protects you, your business, and your employees. 
  3. Receive your Agreement: You will receive a copy of the Employment Agreement and Employment Law best practices, ready for use.


 

Why does my business need Employment Agreements?

Set the right expectations.

You and your potential employee may have very different ideas about what your new employment relationship looks like. An Employment Agreement cuts through the confusion and creates a legally-valid record of the employment expectations and standards from day one. They create a binding contract that sets out the terms of the employment relationship.

Increased flexibility.

Getting a professionally-drafted Employment Agreement means more options. Your Good Lawyer can open up the door to performance-based compensation, help you protect your intellectual property, and prevent ex-employees from stealing your top performers when they leave, among other things.

 


 

What risks will this protect my business from?

Clarify what happens when the employment relationship ends.

To avoid surprises, it’s important to clearly state how the employment relationship can end and both parties’ legal obligations when that happens. This includes things like notice requirements and the amount of payment an employee may be owed on termination. Additionally, the Employment Agreement can lay out confidentiality and non-compete obligations that continue to exist once the employment relationship ends. If the Employment Agreement is silent on these topics, minimum employment standards or common law will apply.

Avoid lengthy and costly disputes.

An Employment Agreement will provide guidance to both the employer and employee if any confusion about the relationship arises. For example, was an employee entitled to a bonus payment? What vacation pay are they entitled to if they resign partway through the year? Is the employee entitled to any IP rights created throughout their employment? A well-written Employment Agreement should clearly answer these questions to avoid lengthy and costly disputes.

Ensure minimum employment standards are met.

Minimum employment standards legislation governs employee-employer relationships. An Employment Agreement must meet or exceed these minimum standards, otherwise the minimum standards will apply. For example, an employer will be liable for vacation pay even if the Employment Agreement fails to include it. A professionally-written employment agreement will help ensure that as an employer, you are meeting minimum employment standards and are not facing unexpected liabilities. 

Read more about Minimum Employment Standards here.

 


 

Frequently Asked Questions

What’s the difference between an Employment Agreement and an Independent Contractor Agreement?

Independent Contractor Agreements are tailored for independent contractors, not employees. Independent contractors are typically described as “self-employed” meaning they run their own business. In contrast, Employment Agreements are intended to govern the employer-employee relationship. It’s important to understand the difference between the two because in an employment relationship, employees have different rights and employers have different responsibilities — such as tax deductions and employment insurance contributions. Additionally, while you are able to contract out of minimum employment standards with independent contractors (e.g. overtime pay, etc.), those standards always apply to employees.

Some signs that you might be hiring an employee and not a contractor include you retaining control over the time and manner in which work is to be done, providing tools for the worker, and covering all associated operating costs on behalf of the worker (e.g. paying for office space or software licenses). Learn more about the difference between Employees and Independent Contractors here. 

Do I need a lawyer in my province for an Employment Agreement?

While you don’t need a lawyer that is physically in your province, we recommend using a lawyer who is at least experienced with employment law in the jurisdiction of your business. Employment law varies across provinces, so local expertise is recommended. If you book an out-of-province lawyer that determines you need someone local, Goodlawyer can set you up with a local lawyer ready to help.

 


"Consistently professional, knowledgeable, reliable. I recommend Goodlawyer, particularly to small business owners."

Deborah, June 2021 — 5-Star Google Review


 

Are you ready to start building your team?

Book a Basic Employment Agreement

Book a Complex Employment Agreement

Your lawyer will assess your situation and make recommendations on which complexity tier you should consider accordingly.

Still have some questions?

Book a free Legal Concierge™ service