Last Updated March 26, 2024
Employment Contract Template
Alternate Names:
An Employment Contract is also known as a/an:
- Contract of Employment
- Employee Contract
- Employee Agreement
- Work Contract
What is an Employment Contract?
An Employment Contract, or employment agreement, is a document created by an employer for an employee that outlines the terms (e.g. obligations, rights, and expectations of both parties) during the course of employment.
Who needs an Employment Contract?
It is a good idea for any employer to have a contract of employment for every employee working for their business. It clearly details the expectations of the job so that both parties (the employer and the employee) understand their roles and responsibilities.
Not only should every new hire have a personalized contract for their specific position, but every time an employee is promoted, changes roles, or moves departments over the course of their career, the Employment Contract should be updated. The updated version can have minimal or drastic changes depending on how the requirements of the employee's new position differs from the previous role.
Regardless of the types of changes made to the employee's role, they should be put in writing and the employee and employer should sign the new document to acknowledge the new terms.
What needs to be in an Employment Contract?
A contract of employment should include:
- Type of employment (full-time, part-time, temporary, contract, etc.)
- Start date (and end date if the position is temporary)
- The length of the probationary period (if applicable)
- Work location the employee is expected to travel to regularly (usually the main office)
- Employer and employee details, including contact information like phone numbers and email addresses
- Job title, normal hours of work, and work duties expected of the new worker
- Remuneration: payment total and type (e.g. salary, hourly wage, commission, or other variances), pay period, overtime policy (if applicable), and any other benefits (e.g. annual leave, sick and disability leave, pension plan, health benefits, etc.)
- Any restriction clauses like confidentiality, non-compete, or non-solicitation (if applicable)
- Termination and notice policies
- Disciplinary and grievances procedures
It is best practice to print two copies of the Employment Contract and have them signed by the employer and the employee so that each party can retain a copy for their records. Some employers make and sign a third copy for their human resources department as well.
Why is it important to have an Employment Contract?
An Employment Contract is the best way to protect both the employer and the employee over the course of the business relationship. An acknowledged agreement between the employer and the employee ensures that both parties are explicitly aware of their responsibilities, which help to prevent potential issues in the future.
There is little room for discrepancy and disagreement by having expectations, obligations, and duties clearly described in the contract. This keeps the employees accountable for their work, and helps protect them from unreasonable requests or changes from their superiors, like being forced to perform duties outside of the scope of their position on a regular basis without proper remuneration.
Frequently Asked Questions:
Employment Contract FAQ 