Question

The questions all relate to the following fact pattern:

Two gentlemen walk into your CPA office and tell you that they wish to start a business. The facts as they relate them to you are as follows:

The two men are brothers named John and Bill Harris. John has developed a secret recipe for beer battered fried walleye nuggets. Bill has lots of money and is interested in starting a business with his brother but has no experience in the restaurant field and no interest in learning. Bill just wants to supply the money and eat nuggets.

John has decided to call the business “The Tasty Nugget” and has found a place recently vacated by another restaurant at Newport on the Levee. John is willing to do all the work including using his secret recipe, starting the business and running it so long as Bill supplies all the money. They have agreed to split any profits 60/40 in favor of John. They have also agreed that John will handle the day-to-day decisions but both brothers must agree upon all major decisions regarding the business. The brothers having taken a CPA Law course decided that they wish to create a LLC and you have sent them to a very competent attorney. An LLC was created using the name Tasty Nugget, LLC.

Question 1.

The Tasty Nugget is up and running and now John has come to you and wants you to help him draw up an employment contact for the employees of the Tasty Nugget. Specifically, the type of employees that John is concerned about are the cooks, waiters and managers. Please outline the items that you believe a contract for employment for the employees of The Tasty Nugget should contain. Include what individuals would be signing the contact, noting any titles that should be used. You should indicate what authority each of these employees have when acting on behalf of the business. Should all employees sign a contract? Some? None?

Answer 1

Answer :-

An employment contract is an agreement that covers the working relationship of a company and an employee. It allows both parties to clearly understand their obligations and the terms of employment.

Let’s start with the employment contract. There are a few things Tasty nuggest LLC must include to help protect both new hire and business when making a job offer.

Here’s what employment contract should include:

1. Job information

Some key pieces of information to start with include the job title and the team or department with which the employee will work. Explain how performance will be evaluated and to whom the new hire will report.

2. Compensation and benefits

Outline the compensation and benefits package. It should include the annual salary or hourly rate, information about raises, bonuses, or incentives and how these may be obtained. Explain what the benefits plan includes — medical, dental, eye care, etc. — what percent the employer pays, and what percent the employee pays. If offered, include information about the 401(k) plan, stock options, and any fringe benefits.

3. Time off, sick days, and vacation policy

Thoroughly explain the time off policy.

How many paid vacation days are accrued per pay period?

Do vacation days increase with long tenure?

Also explain your expectations regarding sick days, family emergencies, or unpaid leave.

Can employees make up hours by working after-hours and weekend events?

4. Employee classification

Define whether the new hire is an employee or contractor to ensure tax and insurance compliance. Uber has faced many lawsuits due to employment misclassification and continues to fight it. Learn what distinguishes employees from contractors, and classify employees correctly right from the beginning so you won’t have to worry.

5. The schedule and employment period

The contract should clearly state if employment is ongoing or for a set term. It should also include when the employee is expected to work to define the employer-employee relationship.

Include the amount of hours the employee is expected to work and any flexible working options like working from home or remotely while out of town. If the job requires working nights and weekends, explain when and how often.

6. Confidentiality agreement

Protect sensitive information like business trade secrets and client data by having the employee sign a confidentiality agreement within the contract. Instead of making this a separate contract or piece of paper, include it as a section of the employment contract and place a field in the section where new hires can sign digitally.

7. A technology privacy policy

Clarify what’s OK and what’s not regarding the use of social media and email on company property. For example, if you don’t want employees to use company computers or mobile devices to update their personal social media channels or check personal email, say so. If you don’t want employees saying anything negative about work on social media, like these two McDonald’s employees did, prohibit it.

8. Termination terms and conditions

Explain what is required for either party to terminate the relationship, including the amount of notice required and if it should be written.

9. Severance or outplacement plan information

It’s a bit early to be thinking about this, but should you or the employee decide to part ways, you’ll want to do so nicely to maintain a positive employer brand. Consider offering severance or an outplacement plan.

10. Requirements after termination

The contract should include any restrictions or mandates on an employee after leaving the organization. For example, an employee may not be allowed to start his or her own business in the same industry within the same locale in a specified time period or work with the business’s clients independently. Clearly, define these terms to help protect your business and its clients.

A written contract is a great way to clearly define the role, the responsibilities, and the benefits to prevent any confusion.

Be sure to carefully read all elements of an employment contract before signing it. Make sure that you are comfortable with every part of the agreement. If you break the contract, there might be legal consequences.

If you're uncertain about any of the contract details, get advice from an attorney before you sign it so you don't bind yourself to an unfavorable agreement.

It's important to make sure you are able to uphold every part of the written agreement. For example, if the contract requires you to stay at the job for a minimum period of time, make sure you will be able to comply with the requirement.

Also, if the contract places limits on where you can work upon leaving the company, consider whether or not you are comfortable with this limitation.

Tasty nugget LLC should use the title which says itself i.e. "Tasty nugget LLC Employment Contract"

The Contract must be signed by all the emploees and the employer if the contract is not signed by any of the person than it can not sue in the near future if any worst outcome happened .