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PLAYBOOK TEMPLATES

Severance & Employment Separation Agreement

A Severance & Employment Separation Agreement formalizes the terms of an employee‚ exit and related payments. This playbook emphasizes release language, confidentiality, and non-disparagement clauses.

Worker Classification

Why This Matters: Accurate classification mitigates risks of tax liabilities, benefit claims, penalties, and audits associated with misclassification.

Negotiation strategy

If you're the Company:

Ensure the classification aligns with the intended role and complies with relevant legal standards. Review the criteria for classification, such as control over work, financial arrangements, and relationship duration.

If you're the Employee:

Confirm that the classification accurately reflects the working relationship to avoid potential legal and financial repercussions. Ensure compliance with IRS guidelines and relevant labor laws.

Essential elements

1

Control Over Work

Defines who controls work.
2

Financial Arrangements

Outlines payment terms.
3

Relationship Duration

Specifies contract length.

Action framework

ACCEPT

Propose edits if the classification criteria are unclear or incomplete.

EDIT

Reject if the clause misclassifies the worker, leading to potential legal issues.

ADD

Add language to clarify classification and ensure compliance with applicable laws.

PRO TIP

Regularly review worker classifications to ensure ongoing compliance with changing laws and regulations.

Example clauses

FAVORABLE

Preferred Clause

"The parties agree that [Name] is engaged as an independent contractor and not as an employee. [Name] shall have control over the manner and means of performing the services, subject to the specifications set forth in this agreement."
NEUTRAL

Fallback Clause

"The parties acknowledge that [Name] is classified as an independent contractor, and this classification is consistent with the level of control and independence required by applicable law."
UNFAVORABLE

Misclassification Risk

"The parties agree that [Name] is an employee, but the terms suggest independent contractor status, leading to potential misclassification issues."

Fallbacks

High-Risk Projects

In high-risk projects, ensure the classification reflects the level of control and independence required to mitigate liability.

Short-Term Engagements

For short-term engagements, emphasize the temporary nature and specific deliverables to support independent contractor status.

Jurisdiction-Specific Requirements

Consult with local legal experts to ensure compliance with jurisdiction-specific worker classification laws, which may impose stricter criteria.
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