The Basic Elements Of An Employment Contract

Before you hire someone you need to ensure that both you and the job candidate are on the same page. The best way to do this is to utilize a contract of employment. There are several essential elements of an employment contract that you need to know about before you reach this point. This post is only a starting point that is designed to get you thinking about employment contracts..

Recruiter scanning an employment contract with a magnifying glass

Employment contracts define the employee-employer relationship. They can be written, verbal, or implied and are designed to protect your company and your employee. These legal documents need to be detailed to ensure that everyone knows exactly what to expect. With a well written employment contract there shouldn’t be any surprises about the job.

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Basically an employment contract will clearly outline the who, what, where, when, why, and how of the job. This is the basis of the working relationship. Delegate the task of writing employment contracts to your legal team. Always allow any signing parties an adequate amount of time to read through the fine print before asking them to sign.

Now let’s take a look at some of the essential elements of an employment contract:

  • Names and address of all parties involved
  • Description of business
  • Clearly defined job position and role
  • Company specific requirements and/or protections
  • Length of job and duration of schedule/work hours
  • Pay, compensation, & benefits
  • Employee classification category
  • Privacy policies
  • Performance requirements
  • Tasks & duties
  • Terms of relationship
  • Termination guidelines
  • Signatures and dates

Are there other things to include in your employment contract? Quite possibly, but that’s up to your legal team to decide. There may be some overlap with your employee handbook and that’s ok. When you can clearly spell out the details of a job it will save you headaches later on.

Both your company and the new employee must accept the terms and agreements of the employment contract to have a binding arrangement. Employment contracts can hold up in the court of law so you absolutely must take them seriously.

Do you have questions about employment contracts? Always consult with your legal team to ensure that your company’s employment contracts are legitimate and work in the favor of all parties involved.

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