Elements of an Employment Contract to Include

It is important to know what should be included in an employment contract. The employer-employee relationship is an important one so both parties should understand what should be outlined in an employment contract.

Elements of An Employment Contract

  • Nature and scope of the employment – the employment contract should clearly specify the job title and job description of the employee. It should include the nature of the work performed by the employee.
  • The term of the employment contract – the employment contract should include the length of the contract and how long it will last which should be spelled out in the contract. The term of contract can vary by one year, three years or five years, as examples.
  • Base compensation and benefits – the employment contract should lay out how the employee will be compensated and what benefits they will receive as part of their employment.
  • Variable compensation – the employment contract should also describe any incentive payments or bonus payments the employee can receive and what they will be based one.
  • Restrictive covenants – if it is part of the agreement between the employee and employer, the employment contract should specify any restrictive covenants such as an employee’s agreement not to compete with the employer while employed with the company or in the future
  • Early termination provision – the employment contract should specify what will happen in the event of early termination of the contract such as by resignation or termination with or without cause.

Each element of an employment contract is important to include. For that reason, employers and employees entering into one should be familiar with the different components of an employment contract and how employment law can help protect their interests.