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Create an Employment Agreement

An employment agreement is a formal contract between you and your employer. This document outlines the expectations the employer has of the employee, as well as any obligations the employer has towards the employee. A number of states have their own rules and regulations on what these employments can and cannot address.

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Learn more about employee agreements

Employers often provide their employees with an employment agreement, which outlines both parties' expectations and obligations. The employer and employee should sign and retain a copy of the signed agreement before the employee starts the job.
Having this information in a written document helps protect both parties define the employment relationship from the start. This helps prevent future disputes related to pay, severance, and intellectual property rights.

Other names

An employee agreement can also be called an
  • Employment contract
  • Contract for employment
  • Employment contract

Who should use this form?

Once the applicant has accepted the job offer, employers are responsible for creating an employment agreement form and presenting it to the new employee. However, the agreement doesn't take effect until all parties sign the contract.

What to include in an employee agreement

An employee agreement should cover the basic information related to the roles of the new employee and your business. It typically includes:
  • Start date and duration of employment
  • Employee job title and responsibilities
  • Employee compensation details
  • Paid time off and other benefits
  • Confidentiality information
  • Ownership of intellectual property
Effective employment agreements should outline specifics regarding at-will employment and termination. For instance, when is the employee entitled to severance and in what amount? What obligations are retained by the either party once the employee is terminated?
At the end of the employment contract, you might see several sections devoted to conflict and disputes. If the parties disagree over some aspect of the contract, for instance, they might have to attempt to resolve the dispute in arbitration before taking the matter to court.
The contract remains in effect until the term of employment ends. Sometimes, the contract will specify a date; in other cases, it will name a time span (such as 6 months or 2 years). Either party can attempt to negotiate a new contract before the existing contract expires.

Next steps

The employee and employer should review and sign the final agreement. You shouldn't have to file the document in any formal manner, but all parties should keep a copy of the document.
If the employer or employee wants to make changes to the contract, they must do so in writing — either on the original contract or in the form of a signed addendum.
If a dispute should arise, the original agreement will discuss what can be enforced or how to handle the issue in court.
Important Terms: