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 employment relationship between an employee and employer. 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 and includes the agreed-upon employment terms and job description.

When creating an employment contract for a new hire or new employee, it's essential to define the job title, expected job duties, and specific duties and responsibilities. This ensures that the employee agrees to the outlined terms and conditions of their role, including hours per week, compensation, and leave policy.

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. It's also common to include a non-compete clause that prevents the employee from working with direct competitors for a specified period after leaving.

Details about the protection of confidential information must be clearly stated to ensure company data remains secure. The contract should also describe how the employment may be terminated by either party, and under what conditions.

In some cases, it’s also necessary to outline severance conditions in case the employer decides to terminate employment without cause.

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
  
  

Example clauses from a standard employment contract include details on compensation, bonus structure, benefits, notice periods, and confidential information handling. These help both parties maintain a professional and clearly defined employment relationship.

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‍What are the types of employment contracts?

There are several types of employment contracts that can be used, depending on the needs of the employer and the nature of the employee’s employment. When creating an employment contract, it’s important to consider the type of employment, the duration of employment, and the terms of the employment. The following are the most commonly used agreements:

Permanent Employment Contract

This contract outlines the employee’s work under full-time employment or part-time conditions for an indefinite period of employment. It typically requires the employee to work a set number of hours and to perform all essential job functions as defined in the job responsibilities section. The relationship may be terminated by either party at any time, following the proper notice procedures. This written employment agreement must comply with all company policies and should be signed by both parties. A permanent employee contract template can help structure the agreement effectively.

Temporary or Fixed-Term Employment Contract

This contract involves a specific period of time or a time of employment that ends on a predetermined date or project completion. It is ideal when employment with the employer is intended to last for a limited time. The contract may terminate employment automatically at the end of the term, unless renewed. This type of employment must still comply with employment laws, and it is recommended to sign an employment agreement before the employee begins work.

Executive Employment Contract

An executive contract is often used for high-level roles and includes detailed clauses of an employment contract such as bonuses, stock options, and extended benefits. It may come with stricter employment policies and negotiated terms of employment. This legally sound employment contract is tailored to the role and often created with legal consultation. Executives typically sign the contract after reviewing the job offer letter, responsibilities, and expectations.

At-Will Employment Contract

Under this contract, either party at any time can choose to terminate employment at any time, with or without cause. However, documentation is key—this document constitutes an employment agreement and should clearly reflect the at-will nature. The contract helps clarify that the employment period is not guaranteed beyond each working day and must be used alongside company handbooks and employment policies.

When creating an employment agreement, it's best to start with a reliable employment agreement template or employee contract template. Our template allows you to customize based on terms of the employment, essential job functions and duties, and the clauses of an employment contract. You can use our template to ensure you use our employment documentation correctly.

If changes are needed later, it's simple to update an employment contract. A well-prepared employment contract helps protect both parties and clearly defines expectations throughout the employment period. If you're unsure where to begin, refer to our legal templates and template download options, or check our frequently asked questions for more guidance.

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 the Employee will start working for the Employer;
• Vacation time – the number of days that an 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 an essential document that describes the work agreement between employer and employee. Although it’s difficult 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 would like to know more about HR management with an online tool like Calamari – visit our HR blog.

Employment Contract Template – Frequently Asked Questions

1. What is an employment contract?

An employment contract is a legal agreement between an employer and the employee who defines their work relationship. It outlines roles, compensation, and terms of employment.

2. What should be included in an employment agreement?

An employment agreement should include position, pay, benefits, confidentiality, termination conditions, and other key clauses.

3. What are the types of employment contracts?

Common types of employment contracts include permanent, fixed-term, executive, and at-will. Each type of employment differs in terms, duration, and termination rules.

4. Can I download a contract template?

Yes, you can get a free employment contract template. It’s available as a PDF for easy use and customization.

5. What is the purpose of a contract template?

A contract template helps employers draft a standard agreement quickly and legally. It ensures that all key clauses of an employment contract are covered.

6. When is a probationary period included?

A probationary period is often added to test an employee’s suitability. It's usually part of the initial employee contract.

7. What is the difference between an employee and a contractor?

An independent contractor agreement is separate from a regular employee contract. Contractors have different rights and obligations than full-time employees.

8. Why is confidentiality important in employment contracts?

Confidentiality protects sensitive company information. It's typically enforced through a non-disclosure clause in the agreement.

9. Can I update an employment contract later?

Yes, you can update an employment contract when job roles, pay, or terms change. Both parties should sign the updated agreement template.

10. Where can I find legal templates for employment contracts?

You can find legal templates online, including a customizable employee contract template on Calamari’s site. These make HR management more efficient and compliant.

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.