A detailed work contract is especially important in a remote work setting. Employees and employers can get confused about their professional boundaries without clear descriptions. On top of that, the smallest incorrect detail in a contract can land your business in a heap of legal trouble.
Fortunately, employment agreements for remote working don’t have to be difficult to create. Read on to learn the most important contract clauses for employees to make sure your global workforce is healthy, happy, and compliant.
A remote working contract is an employment agreement between a remote employee and their employer. It not only outlines the way the employee is expected to act, but it also clearly defines the responsibilities of the employer and the employee's role within the organization.
A remote working contract should at least contain the following:
The primary goal of a remote work contract is to provide clarity for both the employee and the employer. That way, there’s little chance of discrepancies and disputes arising down the line.
Remote employees enjoy a flexible work style compared to in-office employees. Employers need to trust their remote employees to effectively manage a remote team, while providing clear guidelines on work expectations.
That's where remote employment contracts come in. Remote employment contracts should help remote employees know exactly how to fulfill their roles. For example, remote employment agreements could outline working hours during which remote employees need to be available for meetings or client communications.
At the same time, remote working contracts place boundaries on what the employer can expect from employees. For instance, a contract might stipulate that the employee won’t be expected to work beyond normal office hours. In fact, this is a legal requirement in some countries. These rules help to prevent burnout and ensure each employee maintains a healthy work-life balance.
Every company is unique, so there is no uniform remote contract that's suitable for all remote companies. Still, there are clauses that will build a strong remote working contract.
Most remote working contract cover the following:
In many cases, the first part of a remote working contract is the place of work. Even if the employee works remotely full-time, their legal address must be on file.
This address lays the groundwork for the rest of the contract. Different locations have their own laws and regulations businesses must adhere to. A common practice in one country, for instance, could be illegal in another. By establishing the place of work, you know the employment relationship has to respect the laws that are in place in that location.
A remote contract should specify the employee’s job title and description in stone, outline their job responsibilities, and communicate any expected work deliverables.
Check if your remote contract includes a detailed description of the role the employee is taking on. This includes the employee's typical workload and core work hours, collaboration processes, company policies, and mandatory meetings.
Almost every country has regulations that limit employees’ working hours and describe how often they take breaks throughout the work day. Your working contract should match or better these laws in your employee’s country of residence.
Many remote employees work flexible hours, shuffled around personal appointments or home responsibilities. If you require employees to be online at certain times, their contract must reflect this expectation.
The employee’s contract should also clearly explain whether you expect a certain number of hours of work to be done per week or if the employee simply needs to stay on top of their tasks and deadlines. If their hours are set, then the contract should also outline when the employee can take breaks and how long those breaks can be.
It’s important to confirm an employee’s base salary and pay rate before they begin working for your company. Outline these details in their contract, along with their overtime rates.
Include a section that describes when and how the employee can expect payment. This is particularly important for businesses with international teams, since the employer needs to work with different currencies and payment methods.
This section is also where you’ll describe the specifics of any benefits plans the employee is entitled to. For example, your company could offer dependent care or have a company insurance policy.
Describe any measures in place that support employee well-being. A remote contract can outline how the company promotes a healthy work-life balance. For example, specify how employees can take time off or delegate work during extended leave.
Some remote positions require specialized equipment or software. To make sure that employees have the tools that they need, remote contract should break down 1) what the employee needs and 2) who is responsible for fulfilling those needs. If there are any limitations in using certain equipment, clarify that in the remote contract as well.
For example, let's say an employee is given a company laptop to use for work. The remote contract should specify whether the employee can let family members use the device, whether there are any restrictions on apps they’re allowed to install, and whether they will be responsible for replacing the laptop if it’s damaged or stolen.
Confidentiality is an important part of a remote employee’s contract because it’s difficult for an employer to monitor and guide an employee’s behavior when they’re working from a different location.
A confidentiality clause tells the employee everything they’re not allowed to talk about or share outside of appropriate business settings. It can include personal information about their colleagues, client data, information about upcoming projects or products, and sensitive business information, such as financial statements.
The confidentiality clause can also explain best practices for internet and data safety if the employee has access to sensitive information. These could include not working via public wifi connections or using a personal device to handle finance-related tasks.
Remote employees will sometimes incur expenses for their home office setup of remote work responsibilities.
A remote employment agreement should include a clause outlining what the employee is allowed to claim. This can include travel costs when visiting a client or attending a work-related event.
Along with describing what costs the employee can claim, the expense clause should outline how the employee can request and receive reimbursements from the company.
An intellectual property (IP) clause outlines the rights your employee has over the content they create or the ideas they produce during work hours and projects.
For example, does your company’s copywriter own the blog posts they write for the website? Are they allowed to share this content on other platforms? Are they allowed to use this content in their personal portfolio when seeking future employment?
Specifying IP rights in remote contracts helps both employees and employers protect intellectual property and avoid future disputes.
A data security clause describes how the employee should keep personal and professional data secure.
If your company uses a specific data security method or platform, the working contract should explain what that means for the employee and how you expect them to handle data safety. It can also touch on virtual private networks and other best practices for internet safety.
This clause outlines the way your company handles taxes to keep your business compliant in the employee’s country of residence. You’ll explain whether taxes and other deductibles are automatically deducted from their salary, as well as the amounts you’ll withhold.
Since different countries have unique tax laws, each contract should comply with the laws in the employee’s specific region. A global HR partner with in-depth knowledge of taxation systems around the world like Remote can help you stay compliant.
Finally, a remote working contract should always define termination terms so the employee and employer are both protected from unlawful or improper termination.
Within the contract, define when and how both parties can go about terminating the contract. This includes notice periods on how soon terminations should be communicated, and all grounds for fair contract termination.
Your employees need to comply with the contracts they sign, and your business needs to comply with the law. The challenge lies in knowing whether the contract you’ve put together is legal in the employee’s country of residence.
Fortunately, Remote can help. With extensive knowledge of labor laws around the world, we make it easy for businesses to grow while remaining compliant.
With employer of record services and intuitive HR Management software, Remote can help you manage the entire employee lifecycle. Chat with Remote today.
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