What is an Employment Contract?
An Employment Contract serves as the binding document between employer and employee. Employment Contracts set out important terms of employment, and ensure that both parties understand what will be expected of them.
When to use an Employment Contract:
- You are hiring a new employee and wish to specify the employee's compensation and summarize the terms of the employment agreement.
- You are becoming an employee of an employer who will not otherwise be providing a written employment agreement.
- You are an employer and wish to formalize a verbal employment agreement with your current employees.
This (this "") is made effective as of , by and between of , , , and of , , , .
A. is engaged in the business of . will primarily perform the job duties at the following location: , , .
B. desires to have the services of .
C. is an at will employee of . Either party is able to terminate the employment agreement at any time.
Therefore, the parties agree as follows:
. EMPLOYMENT. shall employ as a(n) . shall provide to duties as needed. the services described on the attached Exhibit A, which is made a part of this by this reference. accepts and agrees to such employment, and agrees to be subject to the general supervision, advice and direction of and 's supervisory personnel. shall provide to the following services:
. BEST EFFORTS OF EMPLOYEE. agrees to perform faithfully, industriously, and to the best of 's ability, experience, and talents, all of the duties that may be required by the express and implicit terms of this , to the reasonable satisfaction of . Such duties shall be provided at such place(s) as the needs, business, or opportunities of may require from time to time.
. OWNERSHIP OF SOCIAL MEDIA CONTACTS. Any social media contacts, including "followers" or "friends," that are acquired through accounts (including, but not limited to email addresses, blogs, Twitter, Facebook, YouTube, or other social media networks) used or created on behalf of are the property of . .
. COMPENSATION OF EMPLOYEE. As compensation for the services provided by under this , will pay an annual salary of payable per . This amount shall be paid in accordance with 's usual payroll procedures and subject to applicable federal, state, and local withholding. monthly on the day of each month and subject to applicable federal, state, and local withholding. of the following month and subject to applicable federal, state, and local withholding. semi-monthly on the day and the day of the month and subject to applicable federal, state, and local withholding. on of every other week and subject to applicable federal, state, and local withholding. every two weeks, no later than days after the payroll period that ended on the preceding and subject to applicable federal, state, and local withholding. weekly, no later than days after the payroll period that ended on the preceding and subject to applicable federal, state, and local withholding. Upon termination of this , payments under this paragraph shall cease; provided, however, that shall be entitled to payments for periods or partial periods that occurred prior to the date of termination and for which has not yet been paid, and for any commission earned in accordance with 's customary procedures, if applicable. If this terminates due to discharging from service, payments due shall be paid within seven working days or the end of the next regular pay period, whichever is sooner. If termination is due to quitting the service of , payments due shall be paid no later than the regular payday for the pay period during which the termination occurred. Accrued vacation will be paid in accordance with state law and 's customary procedures. This section of the is included only for accounting and payroll purposes and should not be construed as establishing a minimum or definite term of employment.
. COMMISSION PAYMENTS. In addition to the payments under the preceding paragraph, As an alternative to the payments under the preceding paragraph, may receive commission payments in lieu of regular compensation for any particular pay. will make commission payments to based on of . This commission will be paid monthly on the day of the following month. semi-monthly on the day and the day of the month, each payment corresponding to the semi-monthly period that ended approximately fifteen days prior to the payment date. weekly, no later than days after the payroll period that ended on the preceding . every two weeks, no later than days after the payroll period that ended on the preceding . Upon request by , will make advances against expected commissions in accordance with 's usual policies.
. EXPENSE REIMBURSEMENT. will reimburse for "out-of-pocket" expenses incurred by in accordance with 's policies in effect from time to time. the following "out-of-pocket" expenses in accordance with policies in effect from time to time:
. RECOMMENDATIONS FOR IMPROVING OPERATIONS. shall provide with all information, suggestions, and recommendations regarding 's business, of which has knowledge, that will be of benefit to .
. CONFIDENTIALITY. recognizes that has and will have information regarding the following:
and other vital information items (collectively, "Information") which are valuable, special and unique assets of . agrees that will not at any time or in any manner, either directly or indirectly, divulge, disclose, or communicate any Information to any third party without the prior written consent of . will protect the Information and treat it as strictly confidential. A violation by of this paragraph shall be a material violation of this and will justify legal and/or equitable relief.
. NON-COMPETE AGREEMENT. recognizes that the various items of Information are special and unique assets of the company and need to be protected from improper disclosure. In consideration of the disclosure of the Information to , agrees and covenants that during his or her employment by and for a period of following the termination of 's employment, whether such termination is voluntary or involuntary, will not directly or indirectly engage in any business competitive with . or do business with the following competitor(s):
This covenant shall apply to the geographical area that includes anywhere in the United States. all of the State of Commonwealth of . the area within a -mile radius of . . Directly or indirectly engaging in any competitive business includes, but is not limited to: (i) engaging in a business as owner, partner, or agent, (ii) becoming an employee of any third party that is engaged in such business, (iii) becoming interested directly or indirectly in any such business, or (iv) soliciting any customer of for the benefit of a third party that is engaged in such business. agrees that this non-compete provision will not adversely affect 's livelihood.
. EMPLOYEE'S INABILITY TO CONTRACT FOR EMPLOYER. shall not have the right to make any contracts or commitments for or on behalf of without first obtaining the express written consent of .
. BENEFITS. shall be entitled to employment benefits, as provided by 's policies in effect during the term of employment. These benefits include:
. VACATION. shall be entitled to of paid vacation for each completed year of employment. Such vacation must be taken at a time mutually convenient to and , and must be approved by . Requests for vacation shall be submitted to 's immediate supervisor prior to of each year. days in advance of the requested beginning date.
The provisions of this Vacation section are subject to change in accordance with policies in effect from time to time.
. SICK LEAVE. After completion of of employment, shall be entitled to shall be entitled to paid time, due to illness unpaid time, due to illness or for personal business, for each calendar year beginning January 1, . for each year of employment, with the year to be measured using 's starting date as the point of beginning. Unused sick leave benefits as of of each year Up to of any unused sick leave benefits as of of each year may be converted into cash compensation at a rate of per . Sick leave benefits may not be converted into cash compensation. 's rights to unused sick leave benefits shall be forfeited upon termination of employment. Sick leave may be accumulated from year to year up to a total of ; excess amounts shall be forfeited. Sick leave may not be accumulated from year to year; unused benefits shall be forfeited.
All requests for sick days off shall be made by in accordance with policies in effect from time to time.
The provisions of this Sick Leave section are subject to change in accordance with policies in effect from time to time.
. PERSONAL LEAVE. After completion of of employment, shall be entitled to shall be entitled to paid time, for personal business unpaid time, for personal business or due to illness, for each calendar year beginning January 1, . for each year of employment, with the year to be measured using 's starting date as the point of beginning. Unused personal leave benefits as of of each year Up to of unused personal leave benefits as of of each year may be converted into cash compensation at a rate of per . Personal leave benefits may not be converted into cash compensation. 's rights to unused personal leave benefits shall be forfeited upon termination of employment. Personal leave may be accumulated from year to year up to a total of ; excess amounts shall be forfeited. Personal leave may not be accumulated from year to year; unused benefits shall be forfeited.
All requests for personal days off shall be made by in accordance with policies in effect from time to time.
The provisions of this Personal Leave section are subject to change in accordance with policies in effect from time to time.
. HOLIDAYS. shall be entitled to holidays with pay during each calendar year. All requests for holidays off shall be made by in accordance with policies in effect from time to time. shall be entitled to the following holidays with pay during each calendar year:
The provisions of this Holidays section are subject to change in accordance with policies in effect from time to time.
. INSURANCE BENEFITS. shall be entitled to insurance benefits, in accordance with 's applicable insurance contract(s) and policies, and applicable state law. These benefits shall include:
The provisions of this Insurance Benefits section are subject to change in accordance with policies in effect from time to time.
. BENEFITS. shall be entitled to the following benefits:
. TERM/TERMINATION. 's employment under this shall be for an unspecified term on an "at will" basis. , beginning on . This may be terminated by upon written notice, and by upon written notice. If shall so terminate this , shall be entitled to compensation for beyond the termination date of such termination, unless is in violation of this . If is in violation of this , may terminate employment without notice and with compensation to only to the date of such termination. The compensation paid under this shall be 's exclusive remedy.
. TERMINATION FOR DISABILITY. shall have the option to terminate this , if becomes permanently disabled and is no longer able to perform the essential functions of the position with reasonable accommodation. shall exercise this option by giving written notice to .
. COMPLIANCE WITH EMPLOYER'S RULES. agrees to comply with all of the rules and regulations of .
. RETURN OF PROPERTY. Upon termination of this , shall deliver to all property which is 's property or related to 's business (including keys, records, notes, data, memoranda, models, and equipment) that is in 's possession or under 's control. Such obligation shall be governed by any separate confidentiality or proprietary rights agreement signed by .
. NOTICES. All notices required or permitted under this shall be in writing and shall be deemed delivered when delivered in person or on the third day after being deposited in the United States mail, postage paid, addressed as follows:
Such addresses may be changed from time to time by either party by providing written notice in the manner set forth above.
. ENTIRE AGREEMENT. This contains the entire agreement of the parties and there are no other promises or conditions in any other agreement whether oral or written. This supersedes any prior written or oral agreements between the parties.
. AMENDMENT. This may be modified or amended, if the amendment is made in writing and is signed by both parties.
. SEVERABILITY. If any provisions of this shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid or enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.
. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any provision of this shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this .
. APPLICABLE LAW. This shall be governed by the laws of the State of Commonwealth of .
. SIGNATORIES. This shall be signed by , on behalf of and by in an individual capacity. This is effective as of the date first above written.
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___Sign this document. This document needs to be signed by:
The can be signed online. It becomes effective as of the date specified in the .
___Everyone gets a copy. Anyone named in the document should receive a copy of the signed document. If you sign this agreement online a copy will be securely stored in your account. You can share your document from your account.
This document should not be used if the Employee is covered by a collective bargaining agreement, if the Employee is considered to be a consultant, or if the Employee is considered to be an independent contractor.
This document should be reviewed periodically to evaluate whether circumstances have changed enough to warrant changes to the .
Employment Contract FAQs
What should be included in an Employment Contract?
What should be included in your employment contract will depend on the nature of the employment. Although some companies will include the foregoing information in separate documents, here are some of the most common terms that a good employment contract template will likely include:
- Wage information - The contract should include specific wage information including hourly rate or salary, commission information, etc. It will likely also include payroll schedule information.
- Benefits - The agreement should discuss whether the employee will be eligible to receive benefits such as health insurance, dental insurance, vision insurance, life insurance, and disability insurance, and it should contain information regarding paid time off, vacation, etc.
- Good faith clause - Sometimes called "best efforts," this clause requires that the employee works to their best ability. It may also include information regarding severance.
- At-will and termination - An at-will clause explains whether the employer is required to have a reason for dismissing the employee. It also contains information regarding policies for termination, such as returning company property, etc.
- Confidentiality and/or non-disclosure - The contract should specify which information is to be treated as confidential. It may cover information such as products, inventions, designs, processes, customer lists, pricing, trade secrets, and more. Typically, there is a mention of how long the confidentiality is expected.
What is contract employment?
A contract employee is typically a temporary type of employment classification. Contract employment usually refers to an individual retained by a company for a specific job at a specific wage for a specific amount of time—for example, a landscaping professional being hired for the summer season.
Should you have a contract of employment?
As a general matter, if you are giving or receiving money for any completed work, you should have a contract of employment. Rocket Lawyer's free and highly-customizable Employment Contract template is easy to use, and you can edit, save, and share it in your account. A contract of employment is a legally enforceable document.
Common scenarios under which you'll want a contract of employment include:
- You are hiring a new employee and want to ensure that they understand the employment relationship.
- You are hiring a new employee and you need them to sign a confidentiality agreement.
- You need to communicate to your new employee that they are an "at-will" employee.
- Thus far you've only had verbal employment agreements and need a formal agreement for your current employees.
What are the 4 types of employment?
There are a number of different types of hiring arrangements. Here are some examples:
Employees - An employee can either be a part-time or full-time relationship where a person is hired by a company. An employee can be paid by the hour or with a salary.
If you hire employees for the holidays or other peak times for your business, these might be classified as seasonal or temporary employees.
Independent Contractors - Independent contractors provide goods or services to a company under terms specified in a contract. Individual freelancers or businesses can be hired as independent contractors.
Interns or Apprentices - These individuals work under the direction of a master or highly skilled mentor who either teach skills necessary for licensing, or in the case of an intern, typically provide training for white collar careers.
If you have further questions about making an Employment Contract, ask a lawyer.
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