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Note: Links to our free templates are at the bottom of this long guide.
Also note: This is not legal advice

Introduction

Drafting a staffing agreement is of the utmost importance for any business seeking to hire new staff. With a well-crafted agreement, employers and employees can be certain that they fully understand the terms of the employment relationship, while having a written record that can come in handy should any disputes arise.
At ��������Ƶ we understand how important it is to have an effective staffing agreement in place. We believe such agreements provide employers with protection and employees with fair, equitable terms of employment.
Firstly, it is essential for both parties to agree on the scope of the employment which includes job title, job description, duties and requirements. Of course salary or wages should be included as well as any bonuses plus any other benefits due to the employee under the terms of their agreement. Other specific details such as non-disclosure or non-compete clauses must also be considered for inclusion depending upon what works best for all involved parties.
It is also wise to include workplace policies and procedures such as dress code rules, attendance regulations plus safety standards so that everyone has been made aware of all expectations from day one and before they sign off on their agreement. Furthermore, dispute resolution procedures should also be outlined within your staffing agreement so that if any issues arise both employer and employee are aware of how these will be resolved effectively and swiftly - because nobody wants drawn out proceedings!
Finally at ��������Ƶ we provide free access to our open source legal template library; millions of datapoints teaching us what a market standard staffing agreement looks like - meaning anyone can draft up high quality documents without having to rely on professional legal advice (and fees!) whilst being assured they are meeting best practice standards too! So why not take advantage now by visiting our website below for more information on our step-by-step guidance or follow through directly into our template library today?

Definitions

Job roles and duties - The specific tasks and activities that an employee is expected to complete as part of their job.

Timeline - A schedule of when tasks need to be completed and when goals need to be achieved.

Probationary or trial period - A set length of time at the start of a new job where the employee is “on trial” and their performance is being assessed.

Renewal - Extending the length of a staffing agreement beyond the original end date.

Extension - Increasing the length of a staffing agreement beyond the original end date.

Compensation - Payment or other forms of rewards given to an employee in exchange for their work.

Bonuses or commissions - Extra payments or rewards given to an employee in exchange for their performance or achievements.

Salary increases - Increases in the amount of money an employee is paid over time.

Benefits - Additional services or rewards given to employees in addition to their salary.

Vacation and sick leave - Paid time off that employees can take without it affecting their salary.

Health insurance - Insurance that covers the cost of medical care for employees.

Qualifications - Formal qualifications or certifications that are necessary for a job.

Experience or skills - Knowledge or abilities that are necessary for a job.

Criteria - Requirements that need to be fulfilled in order to be considered for a job.

Interview process - The process that is used to evaluate potential job applicants.

Questions - Questions that are asked of potential job applicants during an interview.

Assessment tests - Tests that are given to potential job applicants in order to evaluate their skills.

Agreement - A legally binding document that outlines the terms and conditions of employment.

Local laws - Laws and regulations that are specific to a certain locality.

Labor laws - Laws that are specific to the labor market and employment.

Minimum wage laws - Laws that set the minimum amount of money that employers must pay their employees.

Employee rights - The legal rights that employees have in the workplace.

Penalties - Consequences for breaking a law or not following an agreement.

Grievances - Complaints or issues that an employee has with their employer.

Disciplinary guidelines - Rules or regulations that outline how to handle employee misconduct.

Disciplinary action - Punishment given to an employee for misconduct or not following rules.

Termination of employment - The ending of an employee’s job.

Grounds for termination - Reasons or criteria that can result in an employee’s job ending.

Dispute resolution - The process of resolving disagreements or conflicts.

Contents

1. Establishing job responsibilities for prospective employees
2. Defining job roles and duties
3. Establishing a clear timeline for job completion
4. Determining the length of employment
5. Establishing the start and end dates of employment
6. Defining the terms for renewal or extension
7. Setting a salary and benefits package
8. Establishing an appropriate salary for the role
9. Establishing the benefits offered with the role
10. Identifying the hiring process
11. Establishing the criteria for successful applicants
12. Deciding on the interview process
13. Drafting and signing the agreement
14. Drafting the employment agreement
15. Ensuring the agreement is in accordance with local laws
16. Signing the agreement
17. Understanding potential legal issues
18. Familiarizing yourself with relevant labor laws
19. Understanding the consequences of any legal violations
20. Establishing an employee grievance process
21. Setting up a process for employees to voice grievances
22. Providing a timeline for grievances to be addressed
23. Outlining disciplinary procedures
24. Establishing disciplinary guidelines
25. Establishing a timeline for disciplinary action
26. Addressing termination of employment
27. Establishing grounds for termination of employment
28. Outlining the procedures for termination
29. Creating a dispute resolution plan
30. Establishing a process for settling disputes
31. Specifying the timeline for dispute resolution

Get started

Establishing job responsibilities for prospective employees

• Identify the role and responsibilities of the prospective employee
• Develop job descriptions that outline the duties of the employee
• Determine the scope of the prospective employee’s responsibilities
• Describe the skillsets and qualifications required for the role
• Clarify expectations for performance and results

When these criteria have been identified and outlined in the job description, the prospective employee’s job responsibilities have been established and you can move on to the next step.

Defining job roles and duties

• Define the job roles and duties clearly and in detail, including the tasks and responsibilities associated with each role.
• Ensure that you have a thorough understanding of each job role and the tasks associated with it.
• Set clear expectations for performance and the job duties expected of each role.
• Make sure that the roles and duties are well-defined and align with the company’s goals and objectives.
• Once all roles and duties are defined, create a job description for each role and post it to the company’s website or other recruitment sources.

How you’ll know when you can check this off your list and move on to the next step:

• When all job roles and duties have been defined in detail and expectations for performance have been set.
• When a job description has been created for each role and posted to the company’s website or other recruitment sources.

Establishing a clear timeline for job completion

• Brainstorm job tasks, roles and responsibilities and the estimated time it will take to complete each task
• Establish a timeline for the completion of each job task, with a focus on the end goal
• Identify any potential issues that may arise that could delay the project
• Agree on a timeline with both parties that is realistic and achievable
• Document the timeline in the staffing agreement

You will know you can check this step off your list and move on to the next step when you have an agreed upon timeline that both parties are comfortable with and it is documented in the staffing agreement.

Determining the length of employment

• Choose a length of time for the employment agreement that is beneficial for both parties.
• Consider the job requirements and the amount of time needed to complete the job.
• Negotiate the terms with the other party, if necessary.
• Record the length of employment in the agreement.
• When the agreement is finalized, the length of employment will be determined and this step can be checked off the list.

Establishing the start and end dates of employment

• Meet with the employee to agree on a start and end date
• Consider the employee’s availability, the company’s needs, and any legal requirements for the length of the employment agreement
• Document the agreed-upon start and end dates in the staffing agreement
• Once the start and end dates are documented, the step is complete and you can move on to the next step, defining the terms for renewal or extension

Defining the terms for renewal or extension

• Decide if the agreement will be automatically renewable, or if extensions will be decided on a case-by-case basis
• Set how much notice must be given by either party should they wish to terminate or extend the agreement
• Decide if the agreement can be terminated without cause
• Outline any restrictions on continued employment, such as a maximum number of renewals
• Specify any limitations for renewal or extension, such as a condition of satisfactory performance

Once these terms have been specified, you can check this step off your list and move on to setting a salary and benefits package.

Setting a salary and benefits package

• Develop a salary and benefits package that is competitive and reflects the value of the role.
• Research the market rate for comparable positions in the local area.
• Consider offering a signing bonus or additional benefits to attract highly-qualified candidates.
• Set aside a budget for additional benefits such as health insurance, retirement savings, and vacation days.
• Finalize the salary and benefits package and have it approved by all relevant parties.

When these steps have been completed, you can move on to the next step of establishing an appropriate salary for the role.

Establishing an appropriate salary for the role

• Research industry standards for similar roles to determine a fair salary for the position.
• Consider the skills and experience of the candidate that you are looking to hire.
• Create a salary range that you are willing to offer, taking into account the above factors.
• Negotiate the salary with the candidate if you feel that an adjustment is necessary.
• Once you’ve settled on a salary, document the agreement in writing.
• When the agreement is finalized, you can check this off your list and move on to the next step.

Establishing the benefits offered with the role

• List out all benefits you are offering with the role - such as vacation time, health insurance, retirement plan, 401(k) contributions, and so on
• Reach out to the candidate to discuss the benefits you are offering
• Negotiate with the candidate if needed to come to an agreement on the benefits being offered
• Document the details of the benefits agreement in the staffing agreement
• Go over the agreement with the candidate to ensure they understand it
• Have the candidate sign the agreement to make it official
• File the agreement for safekeeping
• Once the agreement is signed and filed, you can move on to the next step of identifying the hiring process.

Identifying the hiring process

• Research and identify the steps of the hiring process that are necessary for the role
• Explore options for how external recruitment agencies or headhunters could be used to find the best candidate
• Identify the timeline for each step of the hiring process (for example, when job postings should be made, when applications should be reviewed, when interviews should be conducted, etc.)
• Create a timeline for the entire hiring process, with checkpoints for when each step should be completed
• When you have identified the steps of the hiring process, timeline and checkpoints, you can check this step off your list and move on to the next step.

Establishing the criteria for successful applicants

• Establish a job description outlining the tasks and responsibilities associated with the position.
• Outline the qualifications, skills, and abilities that a successful applicant would need to possess.
• Define the experience, education, and training that would be beneficial for the role.
• When you have established the criteria that a successful applicant would need to possess, you can check this off your list and move on to the next step.

Deciding on the interview process

• Decide if it is necessary to have a panel of interviewers
• Decide on the structure of the interview process, including the questions to be asked and the time allocated for each step
• Consider if you need to provide any resources or materials to candidates ahead of the interview
• Create a plan for sending out invitations, scheduling interviews, and following up with candidates
• Once you have established the interview process, you can move on to drafting and signing the agreement.

Drafting and signing the agreement

• Consult with a lawyer to ensure the agreement is legally binding and compliant with any relevant laws
• Have the employer and employee both sign the agreement
• Make sure to keep copies of the agreement for both parties
• Once the agreement is signed and copies are kept, the step is complete and you can move on to the next step.

Drafting the employment agreement

• Research the legal requirements for the agreement in the location where the employee will be working
• Consult with an attorney to ensure all relevant legal requirements are met
• Outline the specific terms and conditions of the agreement, including job title, job duties, compensation, and any other relevant details
• Draft the agreement using the research and consultation conducted
• Review the agreement with legal counsel to ensure accuracy
• Have the agreement signed by both parties
• When complete, have the agreement notarized

How you’ll know when you can check this off your list and move on to the next step:

• Once the agreement has been drafted, reviewed, signed, and notarized, you can move on to the next step of ensuring the agreement is in accordance with local laws.

Ensuring the agreement is in accordance with local laws

• Consult with a lawyer to ensure the agreement complies with local laws and regulations
• Make sure the agreement does not include any clauses or language that is in violation of any local laws
• Research the local laws to ensure the agreement is compliant
• Check with any other relevant regulatory bodies to ensure the agreement meets their requirements
• Once you have confirmed the agreement is in accordance with local laws, you can move on to signing the agreement.

Signing the agreement

• Ensure that all parties have read, understood, and agree with the terms and conditions of the staffing agreement
• Have all parties involved sign the agreement in the presence of a notary public
• Have the notary public sign the agreement and provide their stamp of approval
• Once all parties have signed and the notary has provided their stamp of approval, the agreement is officially considered signed and binding
• Check off this step as complete and move on to understanding potential legal issues related to the staffing agreement

Understanding potential legal issues

• Research applicable labor laws, including those related to wages, overtime, and discrimination
• Consult with legal counsel if necessary to ensure that all legal requirements are met
• Consider any additional legal issues that may be relevant to the agreement, such as intellectual property rights
• Once you have a thorough understanding of any potential legal issues, you will be ready to move on to the next step.

Familiarizing yourself with relevant labor laws

• Research relevant labor laws and regulations in your area, such as the Fair Labor Standards Act and local state laws.
• Ask questions to a legal professional for clarification on any unfamiliar terminology.
• Take notes on any relevant labor laws and regulations that may affect your staffing agreement.
• When you feel confident that you have a good understanding of the labor laws and regulations that may affect your staffing agreement, you can move on to the next step.

Understanding the consequences of any legal violations

• Review the applicable labor laws and regulations to understand the potential consequences of any legal violations
• Identify any possible legal ramifications that may result from a violation of the labor laws
• Consider the potential fines, penalties, and other legal remedies that may be imposed as a result of a violation of the labor laws
• Research any legal precedents that may be relevant to the labor law and how it will apply to the staffing agreement
• When you are confident that you understand the potential consequences of any legal violations, you can move on to the next step of establishing an employee grievance process.

Establishing an employee grievance process

• Decide how a grievance will be handled - will it be handled in-house or will a third-party be involved?
• Create a formal procedure for the employee to present their grievance
• Draft a policy outlining how grievances will be handled
• Make sure the policy is clear, concise and easy to understand
• Include a timeline for when the employee will receive a response
• Train all employees on the grievance process
• Make sure employees understand their rights and how the process works
• Have a supervisor or manager review the policy and sign off
• Make sure the policy is accessible to all employees
• When you have finalized the policy, you can check it off your list and move onto the next step.

Setting up a process for employees to voice grievances

• Establish a formal, written process for employees to submit and track grievances
• Set a timeline for grievances to be addressed
• Create a central point of contact to handle grievances
• Establish guidelines for how grievances should be handled, including who should be consulted and how decisions should be documented
• Make sure employees are aware of the grievance process
• When all of the above steps have been taken and documented, you can move on to the next step.

Providing a timeline for grievances to be addressed

• Establish a timeline for employees to voice their grievances, such as within a certain number of days or weeks after the issue occurred.
• Make sure the timeline is realistic and can be adhered to by all parties.
• Clearly outline the timeline in the staffing agreement.
• Once the timeline is established and outlined in the agreement, you can check off this step and move on to outlining disciplinary procedures.

Outlining disciplinary procedures

• Determine the disciplinary actions that may be taken for violations of the agreement and document them in writing
• Include details such as warnings, suspensions, or termination of the agreement
• Specify the process for determining when disciplinary action is appropriate and the steps that should be taken
• Ensure that the disciplinary process is fair and consistent across all staff members
• When complete, have all parties involved sign the document
• Once signed, the document is legally binding and can be used to take action against any staff members who violate the agreement

How you’ll know when you can check this off your list and move on to the next step:

• When all parties involved have signed the document and the agreement is legally binding.

Establishing disciplinary guidelines

• Determine what constitutes a breach of the agreement, including but not limited to: lateness, absenteeism, insubordination, falsification of documents, and dishonesty.
• Create a written document that outlines disciplinary procedures and outlines the consequences for each breach.
• Ensure that disciplinary actions are consistent and fair.
• Educate staff and supervisors on the disciplinary guidelines and procedures.
• Have all staff members sign a copy of the disciplinary agreement.
• When all staff members have signed the disciplinary agreement, check this off your list and move on to the next step.

Establishing a timeline for disciplinary action

• Establish a timeline for disciplinary action that outlines appropriate steps and consequences for any violation of the disciplinary guidelines.
• Identify the type of violation, the appropriate response, and the timeline for each step of the process.
• Ensure that the timeline is followed consistently and that any changes are communicated to the entire staff.
• Document the timeline for disciplinary action and make sure that all staff members have access to it.

When you have established a timeline for disciplinary action, you can check this off your list and move on to the next step.

Addressing termination of employment

• Define the circumstances under which the employer can terminate the employee’s employment
• Explain what type of notice the employer and employee must provide in the event of termination
• Specify any additional obligations or duties of the employee upon termination
• Outline what type of severance pay, if any, the employee may be entitled to in the event of termination
• Describe any other benefits the employee may be eligible for upon termination
• Specify any restrictions or limitations on the employee’s ability to seek employment with a competitor
• Indicate any applicable non-disclosure or non-compete obligations

Once all relevant details regarding termination of employment have been adequately addressed, this step can be marked complete and the next step can be addressed.

Establishing grounds for termination of employment

• Decide what grounds for termination of employment are acceptable and list them in the staffing agreement
• List out any special circumstances outside of the listed grounds for termination of employment
• Specify any special notice or other requirements that must be met before termination can be enforced
• Make sure all parties involved in the agreement understand and agree to the grounds for termination and that they are legally binding
• Once all parties have signed the agreement and agree to the terms, this step is complete and you can move on to the next step of outlining the procedures for termination.

Outlining the procedures for termination

• Determine the legal requirements for termination of employment based on the local jurisdiction
• Create a termination policy that meets the legal requirements, including any necessary forms, notices, and paperwork
• Decide on the type of termination procedure, such as voluntary or involuntary
• Provide adequate notice, such as a written notice, to employees in the event of termination
• Establish a timeline for the termination process and any associated paperwork
• Explain the rights and responsibilities of both parties during the termination process
• Create a severance package, if applicable

Once these steps are completed, you can move on to creating a dispute resolution plan.

Creating a dispute resolution plan

• Determine the type of dispute resolution that best fits your needs, such as mediation, arbitration, or a mixture of both.
• Consider the advantages and disadvantages of each type of dispute resolution.
• Outline the procedures for dispute resolution. This should include the process for selecting a mediator or arbitrator, who will be responsible for the costs associated with the dispute resolution process, and what will happen if the dispute resolution process does not resolve the issue.
• Draft a dispute resolution clause for the staffing agreement, which should include the type of dispute resolution, procedures for resolution, and the consequences if the dispute is not resolved.
• Have the staffing agreement reviewed by a lawyer or other professional to ensure that the dispute resolution clause is legally sound.

Once you have determined the type of dispute resolution, outlined the procedures, and drafted the dispute resolution clause, you can check this off your list and move on to the next step.

Establishing a process for settling disputes

• Discuss with the staff member the methods you will use to settle potential disputes, including mediation and/or arbitration, and document in the staffing agreement
• Decide on an appropriate third-party mediator or arbitrator and document in the staffing agreement
• Make sure to include the contact information of the mediator or arbitrator in the staffing agreement
• Include any relevant financial information, such as fees and costs, in the staffing agreement
• Once you have established the process for settling disputes and documented it in the staffing agreement, you can check this off your list and move on to the next step.

Specifying the timeline for dispute resolution

• Determine the time frame for dispute resolution. This should be as short as possible while still allowing for a fair resolution.
• Outline the steps that will be taken to resolve disputes, including timelines for each step.
• Include a clause that allows for an extension if additional time is needed to reach a resolution.
• Set a time limit for the resolution process, and provide a clause for how the dispute will be resolved if the time limit is exceeded.
• Include a clause that allows for an appeal process if needed.
• Once all of the items above are included in the agreement, check off this step and move on to the next.

FAQ

Q: Is a staffing agreement legally binding?

Asked by Emma on 6th April 2022.
A: Yes, a staffing agreement is legally binding, though it depends on the jurisdiction in which it is agreed. This means that all parties must adhere to the terms and conditions set out in the agreement and are legally bound to do so. It is important to bear in mind that the laws that govern staffing agreements vary from country to country, and even within the same jurisdiction. It is therefore important to ensure that the agreement is tailored to meet the specific needs of each party before signing.

Q: What information should be included in a staffing agreement?

Asked by Ryan on 9th June 2022.
A: A staffing agreement should include specific information about the role of the staff member, their rights and responsibilities, salary expectations, hours of work, and any other conditions of employment. It is also important to include details about how any disputes or grievances will be handled and any terms or conditions which are particular to the specific role. Finally, it is important to ensure that all parties have signed and agreed to the terms of the agreement before it is finalised.

Q: Are there any tax implications for employers when entering into a staffing agreement?

Asked by Savannah on 16th August 2022.
A: Depending on where you are based, there may be certain tax implications for employers when hiring staff under a staffing agreement. In certain jurisdictions, employers may be required to pay taxes on salaries paid to their staff as well as other benefits such as health insurance or pension contributions. It is therefore important to familiarise yourself with the relevant laws in your jurisdiction before entering into a staffing agreement with an employee.

Q: How long does a staffing agreement last?

Asked by Liam on 24th October 2022.
A: The length of time that a staffing agreement lasts will depend on the terms of the agreement itself. Some agreements may be for a set duration (e.g., one year), while others may be open-ended with no fixed end date. In some cases, a staffing agreement may even contain provisions for renewal or termination of the contract at any time, depending upon the needs of both parties. It is therefore important to ensure that all parties have agreed upon the duration of the contract before signing it.

Q: What happens if one party breaches a staffing agreement?

Asked by Emma on 1st January 2023.
A: If one party breaches a staffing agreement then this can have serious consequences for all parties involved. In some cases, one party may seek damages from another party for breach of contract or take legal action against them if appropriate. Alternatively, if both parties are in agreement then it may be possible to renegotiate some or all of the terms of the contract in order to resolve the issue without further legal action being taken. It is therefore important to ensure that both parties are aware of their rights and responsibilities under the contract before signing it.

Q: Is there any way to terminate a staffing agreement?

Asked by Ryan on 8th April 2023.
A: Yes, it is possible to terminate a staffing agreement if both parties are in agreement and they have followed any applicable procedures set out in their contract or local law. If both parties decide that they wish to terminate an existing contract then they must make sure that they follow any applicable procedures and provide written notice of their intention to do so in order for it to be legally binding. Additionally, depending upon local laws, some jurisdictions may require that termination payments are made in order for an existing contract to be validly terminated so it is important to ensure you understand your obligations before proceeding with this process.

Q: Can I make changes/additions/amendments/deletions to an existing staffing agreement?

Asked by Savannah on 15th July 2023.
A: Yes, it is possible to make changes/additions/amendments/deletions (collectively referred to as ‘amendments’) to an existing staffing agreement if both parties are in agreement and they have followed any applicable procedures set out in their contract or local law. If both parties decide that they wish to amend an existing contract then they must make sure that they follow any applicable procedures and provide written notice of their intention do so in order for it to be legally binding. Additionally, depending upon local laws there may be other requirements which must be met in order for amendments made between two parties to become legally enforceable so it is important to ensure you understand your obligations before proceeding with this process.

Q: Is there a difference between UK and US law when it comes to staffing agreements?

Asked by Liam on 22nd October 2023.
A: Yes, there can be differences between UK and US law when it comes to staffing agreements depending upon which specific jurisdictions are involved and what type of business services are being provided under the contract itself. For example, US law typically offers greater protection for employees than UK law does when it comes labour rights such as minimum wage and working hours whereas UK law provides more flexibility when it comes to setting terms around training provisions or redundancy payments depending upon which sector you work within. Therefore, it is important that you familiarise yourself with both UK and US law when entering into a staffing agreement with someone based outside of your own jurisdiction in order for you both comply with all relevant regulations and legislation…

Q: Is there an industry standard format for drafting a staffing agreement?

Asked by Emma on 29th January 2024.
A: While there isn’t necessarily an industry standard format for drafting a staffing agreement there are certain key elements which should always be included such as job description; salary expectations; hours of work; rights & responsibilities; termination provisions; dispute resolution process; payment details; insurance requirements; health & safety provisions etc., Depending upon your particular sector or industry there may also be additional clauses which should be included such as intellectual property issues or data protection considerations which need addressing prior to entering into an employment relationship so it is always best practice (and beneficial) for all parties concerned if these matters are discussed beforehand so both sides know what they’re agreeing too before signing anything binding…

Example dispute

Lawsuits Raised by Plaintiffs Referencing a Staffing Agreement

• Plaintiff must provide proof the staffing agreement was breached by the company in order to raise a successful lawsuit.
• Plaintiff must provide evidence or documentation on the specific terms of the staffing agreement that have been violated.
• Plaintiff must demonstrate that the breach caused them harm in order to be awarded any damages.
• Damages can include lost wages, medical expenses, and punitive damages.
• The court may also require the company to take corrective action to remedy the breach.
• Settlement can be reached out of court and can include compensatory and punitive damages.

Templates available (free to use)

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