Employment agreements are contractual relationships, whether or not there is a signed paper contract. In this day and age, however, it is smart to put together an employment contract. Most of the time, a contract simply ensures that everybody is on the same page.

Read on to learn all you need to know about employment contracts.

What Are Employment Contracts?

Contracts are agreements between two or more parties that set out the conditions of that agreement. Employment contracts do just that, with a job or employment arrangement. 

The employer and the employee sit down and outline the terms of employment. A brand-new business partnership will have a new employment contract. If the business has shifting needs, or an employee’s position changes, either party can amend or rewrite a previous contract.

What Should Be In Employment Contracts?

First and foremost, a contract should identify all relevant parties. Most importantly, the employee and the company. Other people – such as the hiring personnel or any direct managers can also be identified. Oftentimes, these people are identified by their position rather than their legal name to avoid issues in the future.

It is also important to identify the type of employment, as there are many different options. Will the employee be full-time or part-time? Or is the work seasonal? If they are a seasonal employee or part-time employee, will they have an option to transition to full-time? The contract needs to include the expected days and hours of work as well. 

Employment contracts should also enumerate employee responsibilities. Responsibilities may, but do not have to, include expectations concerning any professional licenses and certifications. Additional expectations may include continuing education or re-certification hours as well. 

The contract also needs to explore the benefits the employee will receive for their efforts. The main benefit that most people are concerned with is their pay. Obviously, the amount is the issue at hand, but there should be specifications as to whether pay is project-based, hourly, or a salary. Benefits may also include insurance coverage, discounts on company products or services, retirement accounts, paid time off, education options, childcare options, or more. Benefits are often a balance of what the employee needs and what the business can provide.

Finally, the part of the contract that people are most uncomfortable discussing – termination of employment. The employer should list out possible reasons for dismissal, including disciplinary actions that will be taken before the end of the contract. The contract should also include how much notice employees should give before they leave the job.