CORE HR

Employment Contract template and overview

An employment contract is the document that regulates the working conditions between an employer and employee. Discover what's included in the contract of employment and download the free template!

A contract of employment is a contract that is recognized as a legal business relationship between an employer and an employee. It's the most common and beneficial type of contract for employees. The employment agreement outlines the responsibilities and rights of both parties for a given time duration.

Except for the most important details about the parties, inside the working agreement, you can include information about working time, probationary periods, termination procedures, duties of confidentiality, and compensation.

Contract of Employment is also known as:

  • employment agreement,
  • terms of employment,
  • working agreement,
  • contract of employment,
  • job contract,
  • contract employee agreement,
  • work contract,
  • contract of services.

ECT ECT

Types of employment contracts

There are a few types of employment agreements the parties can use. The most popular Employment Contracts include:

Permanent employment contract - used for employees who will work regular hours (full-time or part-time) and are paid a salary or hourly rate. The contract can be terminated by both parties. Temporary or fixed-term employment contract - for employees that work full-time or part-time but for a fixed period or are employed temporarily without a termination date but the date is expected on notice. Executive employment contract - it's a contract made between a highly compensated executive and an employer. Both parties to this agreement can negotiate the terms with legal assistance. At-will employment contract - allows an employer and an employee to terminate at any time without notice and cause. The right to terminate the employee must be documented within the employment contract, employee handbook, and employee policies and procedures.

What is included in the employment agreement?

When creating the employment contract, there are some terms that it's necessary to include. The basic elements that have to be included are:

  • The parties of the contract - the name of a person hired to work ("Employee") and the name of the company hiring the employee ("Employer");
  • Position - title and work description and responsibilities;
  • Compensation - the amount of money paid for an hour, week, or month, has to include overtime, bonuses, commission, and the compensation schedule; the frequency of payment;
  • Start date - the day when Employee will start working for the Employer;
  • Vacation time - the number of days that employee can use per year; *Benefits - details about the health insurance, sick days, paid time off, and other benefits.

Except for the basic conditions, the employment agreement can also include the following:

  • non-disclosure agreement or confidentiality agreement,
  • non-compete agreement,
  • non-solicitation agreement,
  • probationary period,
  • termination conditions,
  • work for hire clause,
  • agency provision.

Additionally, an employment contract can require an amount of notice before quitting so the employer can start looking for a replacement. Without a written agreement form both sides can quit at any time if the reason for dismissing is not deemed as wrongful termination.

Summary

A Contract of Employment is a very important document that describes the work agreement between employer and employee. Although it’s hard to prepare it correctly due to the many legal details, it is a protection for both parties to the contract in all work-related situations. That’s why you can use our Employment Contract Template!

And if you want to know more about HR management with an online tool like Calamari - visit our HR blog.

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