As you hire in new countries, clear and comprehensive employment contracts are a must. Contracts protect everyone: your company, employees, and the legal entity that hires them. They serve as the foundation for a healthy working relationship, outlining everyone’s rights, responsibilities, and expectations from the start.
As a general requirement, most countries require the following information included in an employment contract. Plane will collect the following employee information from you when you add them to the platform as an Employee:
Full legal name
Hours to be worked
It’s important to consider several key factors and tailor your agreements to suit the specific requirements of each country. Some of these factors may include local labor laws, minimum wage regulations, working hours, leave policies, intellectual property rights, and more. By addressing these crucial aspects of employment within your contract, you’ll minimize the risk of misunderstandings and set the stage for a mutually beneficial and legally compliant working relationship.
Plane ensures that all our contracts are localized and compliant with all applicable labor laws, so you can rest assured that all the legal terms check out. Here’s what else you need to know about employment contracts created through Plane.
ℹ️ Important Notes
Plane’s contracts are localized and compliant with all laws and regulations.
We’ll generate the first draft of a contract for your review within five business days of an employee completing their profile.
Local labor laws may affect what terms you need to include in your contract.
What should you consider including?
Probationary periods or trial periods are generally allowed in most countries, commonly lasting anywhere from 3 to 6 months. If you’ve never worked with an employee previously, it may be a good idea to include a probationary period in your contract to make sure that the situation is a great fit for everyone. However, some countries, like Chile and Belgium, don’t allow probationary periods; make sure to check with our team first.
Employee compensation often goes beyond a monthly salary. If you want to offer additional monetary incentives as part of your compensation package, you can detail these incentives in the “Additional Incentives” onboarding task when adding an employee to Plane.
Common incentives we can include in your employment contract:
One-time signing bonus
One-time or recurring allowances or stipends (subject to tax), such as:
Healthcare or wellness allowance
Education stipend or allowance
Guaranteed annual bonus
Some countries have a mandatory work-from-home allowance for employees that work fully remotely. We will let you know if this is required.
We also cannot include variable compensation in the employment contract, as we don’t manage the employee’s performance directly. You can have a separate agreement explaining the relationship between Plane, Plane’s hiring partner, and you, and include any other variable compensation such as bonuses, commission, or equity.
13th and 14th month bonuses
Certain countries, most commonly in Europe and Latin America, have mandatory 13th month bonuses. These are typically paid in December and considered a Christmas bonus. Additionally, some countries require a holiday bonus to be paid out to employees when they take paid time off—often referred to as a 14th month bonus, even though they might not amount to a full month’s pay.
If you are onboarding an employee in a country that has 13th and/or 14th month payments, we will reach out to you to confirm how you would like to handle these additional payments.
Collective Bargaining Agreements (CBA) govern requirements in certain countries. As part of the CBA, employers may be required to do things such as provide guaranteed annual raises, pay for an employee’s supplemental healthcare, or pay for an employee’s life insurance policy.
Our team will communicate if any of these requirements apply to you during onboarding.
Vacation & sick time
Depending on the country, employees are guaranteed certain amounts of paid time off and paid sick leave by law. If you wish to align PTO amounts more closely with your own internal policies, we can always offer more generous vacation and sick leave policies than those guaranteed by law. Please just let our onboarding team know by emailing email@example.com.
By law, employees in different countries are guaranteed certain rights and benefits, such as maternity and paternity leave, healthcare, pension contributions, etc. You can make changes to these so long as the changes are more generous than the minimum requirements guaranteed by law.
After the employee has completed their Plane profile, it can take up to 5 business days to share a first draft of the contract for your review.
Frequently Asked Questions
I have a template contract that our company uses for our hires in the United States. Can you adapt that for our international employees?
No. Labor laws vary in different countries, so we will need to use our locally compliant contract for the jurisdiction in which you are hiring.
Can I add reference to our IP agreement?
Upon request, we can provide a direct IP agreement that flows intellectual property back to you, where the flow of IP is Employee → Local Entity → Client. Read more about this here or contact us at firstname.lastname@example.org for more information.
Can I make changes to the employment contract?
Yes, to a certain extent. You can increase the number of vacation days, change the length of the probationary period, or offer additional sick days to more closely align with your company’s policies — as long as the adjustments meet or exceed the minimum statutory requirements of the country in which you are hiring.
For textual changes (e.g., adding/removing clauses, adjusting the wording of existing clauses, etc.), all changes need to be approved by our legal team first for compliance and are subject to separate, additional fees. We cannot guarantee that any requested changes would be accepted.
I included the employee’s stock options when onboarding them in Plane, but I don’t see them in the employment contract. Did you forget to include them?
This was not an oversight. We intentionally don’t make any reference in writing to stock options, as they are issued by your company directly and not by our entity with whom your employee has an employment contract. Most stock purchase agreements are already optimized for paying anyone that performs services for your company (i.e. employees, contractors, employees hired through PEOs), so you can continue to grant options through whichever cap table management software you use.
We also cannot include commission or incentive plans in employment contracts. However, you can provide the employee with a side agreement that outlines the terms of said plan(s).