As the name implies, this is the letter with which the startup employs employees, or the offer contract with which it engages other “workers” who may not necessarily be employees, e.g. consultants, interns, contract staff etc.

These letters must be carefully worded to ensure that the statutory rights and benefits applicable to each class of workers are covered. You also want to be careful not to term a person who is actually an employee a contract staff and vice- versa. One practical reason to note the fine line separating an employee from other types of “workers” is the statutorily required pension contribution scheme by an employer on behalf of its employees. Any employer who has more than 3 individuals in its employment is statutorily obliged under the Pensions Reform Act (2014) to deduct 8% pension from its employees’ compensation, add an additional 10% to the deducted funds and remit the total 18% to an approved Pensions Fund Administrator on behalf of the client.