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Temporary Employment Agreement

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A temporary employment agreement is signed to oversee the conditions of an employment relationship that is supposed to last for a short period of time. This form of contract is made between a company with its potential individual employee or two different companies. It is also known as an interim employment agreement. By drafting an effective temporary employment agreement, a smooth and successful relationship between the two parties is ensured during the course of employment. This blog will discuss all the details concerning a temporary employment agreement. So, let's get started!

Essential Elements of a Temporary Employment Agreement

For an effective temporary employment agreement, the most important clauses or key elements are as follows:

  • Job Title: It provides details regarding the nature of the work you ought to do by the temporary employment agreement. Specifically, it ensures that both the employee and the employer are clear about the duties and responsibilities of the employee. The agreement also includes a consensus ad idem, which means 'meeting of minds.'
  • Salary, Bonuses & Benefits: This outlines the stipend that the employee would receive from the employer during the course of employment. This clause allows negotiation for both parties before entering the agreement. Also, it entails bonuses and certain benefits packages that the employee would receive as per their desire. This mainly includes the annual salary of hourly salary, bonuses, raises, health benefits, incentives, health benefits, retirement plans, signing bonuses, and other benefits.
  • Length of Employment: Specifying the course of employment is very important before entering the agreement. It also includes the provisions for renewal of employment, if necessary, in the future. This section in the agreement sometimes is referred to as 'schedule.' If the employee can only work for certain days a week, such conditions must be specified in the contract.
  • Holidays and Leaves: Specifying the leaves, time-offs, and holidays is an important element of an employment agreement. The agreement also includes a comprehensive time-off policy. It entails how the time off will be accrued on its use and what advantage the employee can take. The company policies specify these and also include details regarding the paid leaves granted to the employee.
  • Intellectual Property Clause: This defines to whom the intellectual property would belong during employment. The ownership of the intellectual property usually belongs to the company. This clause is added to prevent any future ambiguities.
  • Communication Channels: This clause specifies to whom the employee would report by creating communication channels that oversee efficiency and transparency. Creating such a line of communication is extremely important to establish a hassle-free work environment.
  • Confidentiality and Privacy: This specifies the circumstances where the employees must have anonymity. It ensures no company privacy violation since the employee can access all the trade secrets while working with the company. It usually includes the legal consequences if the employee is found to be revealing any confidential information.
  • Termination and Severance: This specifies the criteria based on which the employee's termination can occur. Ensuring that the company is not negatively affected or has tarnished reputation by the termination is important. It also includes severance packages.
  • Restrictive Clauses: This clause mainly comes into function after the termination. It includes non-compete, non-dealing, non-poaching, and non-solicitation clauses. It has an effect on the future jobs of the employee.

Types of Temporary Employment Agreements

When it comes to temporary employment agreements, there is a broad category. We have listed down the most prevalent ones:

  • Internships: In an internship, companies offer students or graduates to work with them, comprehend the hands-on work, and gain experience in their respective fields. They work for a short period or temporarily before joining the organization as a full-time employee. Employers get an extra hand of work at a low cost in this type of employment. This also forms a recruitment process that promotes interns to convert their temporary position into a full-time position with the company.
  • Part-Time Employees: This type of employment is where an employee comes under a contract of service to work less than 35 hours a week. This contract pays employees hourly, including break times or fixed monthly sums. This allows the employers to hide those individuals which they need for a certain time only. A part-time employee helps take a burden off the workload and provides extra support to full-time employees.
  • Freelancers/Contractors: These individuals are self-employed personnel and take on freelance or contract work from organizations and companies. They are mostly responsible for all the work that the full-time employees are not. These responsibilities include specifying their work hours, tracking their time on various projects, etc. This works wonders for some projects, as freelancers are known to be experts in their domains. Moreover, companies are free to hire potential personnel across the globe as the nature of this employment is remote, which gives flexibility to work.

Large businesses, rather than small businesses, mainly use contractual and temporary employment. For short-term periods or seasonal increases in business, an employer hires temporary employees who can work as a helping hand in the company's project.

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Benefits of Temporary Employment Agreements

Many advantages come with signing a temporary employment agreement, some of which are:

  • With temporary employees, companies gain access to an array of professional, skilled individuals who are pre-screened beforehand. It also helps save the employers valuable time from the hiring process.
  • It helps reduce employment costs as temporary employees are considered cheaper labor for companies. This is because they are not provided with the same employment benefits as full-time staff.
  • Temporary employees provide a trial period to their company before recruitment. This helps the employer specify and assess employees' performance before hiring them full-time.

Key Terms for Temporary Employment Agreements

  • Negotiation: It is a strategic discussion between the two parties entering the contract to settle an issue with the details of remuneration in a way acceptable to both.
  • Consensus Ad Idem: A Latin term used in a contract refers to a meeting of the minds.
  • Anonymity: It means the employee does not have to be an individual identity to ensure the confidentiality and privacy of the employer.
  • Non-Solicitation Clause: It is a clause included in a contract where the employee stops working for the company and starts working for another. Then, it abstains the employee from summoning or soliciting any business clients or confidential information of the previous employer.
  • Severance: The financial term on which an employee would end their employment with a company after the termination of the contract.

Final Thoughts on Temporary Employment Agreements

A temporary employment agreement outlines the conditions based on which employment will be held temporarily. The terms of this form of contract serve as the primary distinction between a temporary employment contract and a regular employment contract. The former is the most cost-efficient and effective for the employer for a particular project. Hence, instead of hiring a full-time employee, they hire one for a short-term or temporary period. Many circumstances require the need for a temporary contract. Moreover, its duration can vary as per the company's policies.

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