Hiring Remote Employees: Essential Clauses for Remote Contracts
A new joinee reading the Essential clauses for remote contracts

Hiring Remote Employees: Essential Clauses for Remote Contracts


The Covid-19 pandemic made remote work more popular and brought new dynamics to the workplace due to technological advancements. With such a shift in business practices, it’s fair to say flexibility and remote work are here to stay.

The number of employers hiring remote employees is increasing. Yet, hiring remote employees can be challenging. Therefore, remote employee contracts must contain clauses defining the working structure and how these remote contracts are different from regular contracts.

In this article, we will cover all the details you need to know about contracts for remote employees, including the essential clauses.

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History of Remote Work

A employor discussing the essential clauses for remote contracts

Before the industrial revolution, people sold their skills and goods from home. Blacksmiths, Carpenters, and men of various skills plied their skills from home. They displayed and sold their wares from home. People did not need to travel or converge at a particular place to complete their work.

The Industrial Revolution came with the creation of factories and machines. People needed to work in the factories and operate the machine. They had to gather together in a place to get work done. It introduced the traditional office space. The Industrial Revolution was the era that saw workers gathering to work.

Soon came the advancement in technology. The invention of the internet enabled connectivity around the world. It also brought about alternative ways of working. It gave birth to modern-day remote work.

The covid-19 pandemic made remote work gain popularity. Due to the pandemic, people could not work from offices. Employees worked from the comfort of their homes. The post-pandemic era has seen more businesses going remote. More employers now give employees the option of working from a remote location. Likewise, job seekers are more likely to apply for remote jobs. 

Who is a Remote Employee?

A remote employee works from a location outside the traditional office environment. They are employees who do not need to commute to an office daily to complete their goals and tasks. In other words, remote employees are employees who can work offsite.

A remote worker can be from the locale of an employer or an international location. Such a person can work from home, in a coworking space, across the world, or anywhere. A remote employee can be a permanent, part-time or full-time employee. 

What are Remote Work Contracts?

A new employee reading Essential clauses for remote contracts and signing their contract

Remote work contracts define the job responsibilities of remote employees. They are usually between remote employees and employers. An employee signs a remote work contract at the start of an employment arrangement.

It is an employment agreement that stipulates clauses and commitments for remote employees. Contracts for remote employees must contain essential clauses that cover employees’ work needs. Clauses that the contract stipulates are on work arrangement, tools, and expenses.

Remote work contracts must cover the job expectations and define the employee’s commitments. An employer must take note of these essential clauses for remote contracts when drawing up a remote work agreement.

What are the Essential Clauses for Remote contracts?

A contract for remote employees must contain essential information about the parties. It must state in explicit terms the employment rights and responsibilities of the employee. The following clauses are necessary for remote contracts are:

Type of employment arrangement

It is an essential clause for remote contracts between employers and employees. It specifies the working hours, work schedule, team collaboration, etc. It also states other arrangements in line with the remote policy of the organization. Will it be a hybrid working arrangement or a full-time remote job?

This clause tells whether a contract for a remote employee is permanent, part-time, or full-time. It should also state if an employee can work flexible hours.

Employee’s compensation

A list of documents related to salary in Essential clauses for remote contracts

Contracts for remote employees must contain a section about compensations and benefits. It provides information about how much the employee’s salary is. The employee compensation clause must also provide every other detail about payment.

This section may also have a subsection to cover the perks and extra benefits a remote employee may enjoy. For example, insurance and overtime allowances can be included here.

Communication modes and responsiveness

Good communication between employees, co-workers, and supervisors is critical. It contributes to a healthy work environment and ensures that nobody is left in the dark. The remote work contract must stipulate the mode of communication, and the time a remote worker must respond to communications.

Spelling out the response time is vital, especially when there is a difference in the time zone. A difference in time zone may make it difficult to determine the time. And that is the more reason this clause should be included in a remote work contract.

Workspace requirements

Including a clause that gives a detailed description of the workspace requirements for a remote worker is essential. It will do two things; first, it will ensure that a homework space or any workspace is free from any hazard that will cause injury. The other thing it will do is limit an employee’s insurance claims. Thus, with this clause, a remote worker will not attempt to file compensation claims for areas outside the workspace. 

Equipment and software clause

Another essential clause for remote contracts is the equipment and software clause. It is vital if the employee’s role requires technical equipment or software. This section will specify the relevant tools and applications for the job position. It will also specify how an employee will access these tools. An employee will know if to use personal or company devices for work through this clause.

Often, an employer provides employees with the tools they will use for work. In such cases, the employer must enclose clauses to maintain such tools.

An employee must use an employer’s equipment only for the employer’s business.


Being a remote employee entails extra expenses. Thus, an essential clause for a remote contract is the Expenses clause. Energy, internet connectivity, and travel expenses come with remote working. Employers need to cover these expenses in a contract for remote employees.

This section must stipulate how an employer will reimburse the employee for any expense.

Confidentiality and data protection

Employees who work from remote locations may have access to confidential information.

An employer must ensure that a remote employee keeps data and information confidential. Therefore, a clause on confidentiality is an essential clause for remote contracts.

This clause must define steps remote employees must take to keep the information confidential. Some steps an employer can take to ensure information is confidential are:

  1. Employees directly save information on the company’s electronic file storage.
  2. Providing instruction on how to and how not to store the company’s records.
  3. Placing access requirements and permission for certain employees.

Intellectual property clause

The intellectual property clause is an essential clause for remote contracts. Intellectual property is an asset to any business; thus, it is a vital part of a contract for remote employees.

Given the nature of remote working, companies can hire across national borders. Laws relating to intellectual property differ from country to country. Thus, a contract for remote employees must have an intellectual property clause. This way, an employee can determine which creativity is within the employment contract or not.

Termination of Employment clause

An employer must state how a remote employee can rightfully terminate the employment contract in a remote work agreement. An employer must take into consideration relevant employment laws when inputting this clause. It is because the employment laws governing a remote employee’s geographical location may differ from that of an employer. Complying with these laws could save an employer from a lawsuit.

What happens to the company’s materials when remote employment is terminated? How will an employer retrieve his equipment? These are some issues this section should discuss.

What are the Advantages of Hiring Remote Employees?

A team of employees discussing about Essential clauses for remote contracts

Some benefits associated with hiring remote employees are:

It allows you to access a broader talent pool

Talents and skills are not restricted to location. Hiring remote employees gives an employer access to skills across the world. An employer can hire professionals without any restrictions on location.

Hiring remote employees increases a company’s multicultural diversity. It makes for international inclusivity. Hiring remote employees from across the globe would boost a company’s cultural diversity. Hiring remote workers also give a company an international perspective.

Hiring Remote Employees saves costs

Employers save money when they hire remote employees. Global Workplace Analytics estimates that US employees could save $11,000 if their employees worked remotely.

A company can reduce office spaces and real estate expenses if it hires remote workers. A company does not have to spend costs on relocating a worker it hires from a different country.

Also, employers in a competitive city can hire professionals outside their locale. Thus, these companies can employ more affordable labor.

It makes for higher productivity

There is an assumption that remote workers are less productive. Yet, surveys and studies have proved the opposite. Remote employers save commuting time and can focus on work. It increases productivity and turnover.

Productivity also increases when an employee can work the hours that suit them.

It makes a company prepared in the face of disaster

A remote workforce entails that a company can run even in the face of disaster or a global pandemic.


There is a paradigm shift in the definition of the workplace. The world has shifted to flexible work arrangements and remote workforces. According to Gartner, 74% of companies plan to transition their workers to permanent remote workers. Remote work has come to stay. Against the assumptions, hiring remote employees has many advantages. Employers must ensure that contracts for remote employees spell out the duties of employees. 

It must also define the employment relationship. Remote work agreements must include important clauses for remote contracts, making it easier for parties to know their responsibilities and duties.

Are you looking to hire a remote employee? Do you need the service of a legal expert in drafting a remote work contract for your remote employees? LegaMart has got you covered! LegaMart is an online legal platform that provides a variety of legal services. We exist to ease your process of finding a reliable and experienced legal expert. With our LegaMart directory from around the world, hiring a lawyer that meets your requirements is just a few clicks away.

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