Armstrong & Associates Employment Law Firm

5 elements all employment contracts should contain

As opposed to a standard employment agreement, an employment contract addresses the employer-employee relationship in greater detail.

While an employment contract includes items unique to an individual company, here are five elements that every such contract should contain.

1. Job requirements

The employment contract should begin with a description of the position and the duties required for that position. This section should also list the location of the job and the hours of employment.

2. Performance expectations

Performance requirements should include the skills expected of a new hire. State production goals here. If the position is in sales, insert the expectations for sales volume. List objectives a new employee should pursue.

3. Compensation

An employment contract should always define the compensation the new hire can expect. Specify the type: hourly, salaried or commission. Include the overtime policy of the company. In the case of a commission, explain the percentage and how the company manages draws.

4. Company benefits

Some potential employees are more interested in the benefits a company offers than in the salary itself. This section should describe the benefits package. Include insurance information starting with the company’s healthcare plan. Cover company holidays, vacation time, stock options, profit sharing and retirement plans. State any premiums an employee must pay as well as memberships or professional licenses.

5. Termination details

An employment contract should end with a section about termination. Explain the process of terminating an employee with or without cause. Cover the severance information that applies in each of these instances, including the basics of a severance agreement if this position calls for one.


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