It is important to know what to include in an employment contract both for the protection of the employer and employee. An employment contract is an important document because it will govern the employment relationship between the parties who will want to ensure their interests are protected.
What to include in an employment contract
There are several important, including some basic, components of an employment contract that should be in the drafting of the document including:
- Duration of employment – the employment contract should include the duration of employment and should include a start date and an end date for employment.
- Employee position and responsibilities – the employment contract should include at least a general description of the employee’s position and responsibilities.
- Employee work schedule – the employment contract can outline what days and hours the employee will be expected to work and what holidays they will not have to work.
- Employee compensation – the employment contract should include how the employee will be compensated including the amount of their compensation and if they are hourly or salaried and if there is a bonus structure and equity options.
- Employee benefits – the employment contract should outline the benefits the employee should expect to receive such as health insurance. Some benefits are required and others may be elective.
- Intellectual property ownership – the employment contract should include intellectual property protections if the employment relationship is terminated.
- Termination guidelines and severance payments – the employment contract should outline what behaviors may be grounds for termination and include the details of any severance package that was negotiated.
- Dispute resolution – the employment contract should include any expectations for how disputes will be resolved.
An understanding of employment law can help employers and employees carefully negotiate an employment contract. Both parties should know what is important to include in an employment contract.