Sample Employee Contracts

Written by Helen Glenn Court
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One of the thinnest lines to toe in the day-to-day matters of today's business world is an employment contract. On the one hand there's a business to run, and on the other the legalities and equities of the workplace to follow. Human resources departments and corporate attorneys have a great many p's and q's to mind. Employee contracts are well up on the list. To develop a contract suited to your company, look over as many examples as possible for organizations similar to your own. They will lack the specifics, of course, but provide the necessary template that you'd then adjust.

An employee contract, like any legal document, is a mutual agreement equally binding on both parties. Every responsibility is outlined, or should be. The goal is to protect both the employer and the employee. At stake are discrimination claims, health benefits, retirement options, corporate disclosure, tax payments, termination clauses, sick and vacation leave, and a host of other issues.

Items Covered in Employee Contracts

Starting at the top, however, all employment contracts should spell out the basic conditions. These will include the type of work, the hours that will be worked, and the pay for the work. It's important to bear in mind in drawing up a contract that items or issues not explicitly covered will fall under common law rights. More often than not, this favors the employee when it comes to ideas, discoveries, and the like.

Let's go into a little more detail on what a judicious employee contract will ideally cover explicitly. In general, there are the term (period) of the employment and the duties of the employee. Then comes compensation, which will include salary, expenses, and paid leave; other possibilities include disability, health, and retirement benefits, as well as stock options and bonus or incentive plans.

Three other issues are also commonly addressed, for obvious enough reasons: confidentiality, noncompete, and termination. Confidentiality covers in part corporate finances, operating expenses, pricing formulas, trade secrets, and the like. Noncompete clauses speak to some extent for themselves, and generally cover employees leaving a firm and consultants. Termination clauses are critical elements of employee contracts. They generally cover provisions that are cause for termination, such as inability to perform required duties, violations of responsibility, corporate reorganizations, or perhaps low profits.


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