What Is an Employee Contract?

An employee or an employment contract is a signed agreement that legally defines the relationship of an employee and an employer. This document establishes both the rights and responsibilities of both parties during the employment period. This is commonly applicable to part-time, full-time, permanent, temporary, and probationary employees.

How to Write an Employee Contract

employee contract template

Statistics shows that there is an increase of workforce in the business world. Writing an employment contract is important in hiring someone because this clarifies expectations and responsibilities between you and your employee. At the same time, this protects you from cases on employee termination, resignation, and wage disputes. The absence of a contract leaves an ambiguous relationship between you and your employee.

1. Input Basic Information

Make your contract simple and legible. Input the basic information needed in your contract such as the title of your contract, the parties included as well as their respective information. A simple contract commonly has around 1 to 2 pages, but you can always add more to elaborate further information in your contract.

2. Specify the Period of Validity

Set the period on how long the sample contract is valid. Specify your dates and months, otherwise your employee's term of employment will go on for eternity. You can have a month-to-month contract with your employees or an average contract that may last for a semester, a year, or more.

3. Describe the Duties of the Position

Every employee has different positions and responsibilities in your company. Outline your terms and conditions as well as describe their duties and position in the contract. Elaborate clearly their job description and indicate their assigned area. Include their regular work hours as well as overtime policies and rates. Don't forget to state their monthly salaries or wages as well.

4. Define Your Compensation and Benefits

Compensate your employees properly and outline it in your contract. List down their benefits such as government mandated benefits, leaves, insurance, and bonuses. Describe each of these benefits and specify their qualifications on how to acquire them. You may include performance incentives if this applies in your company.

5. Explain Confidentiality and Termination Process

Once your employees begin to work in your company, make sure that no information is shared to outsiders. Keep things confidential between you and your clients and add a confidentiality statement in the contract. Explain limitations on your employee's ability to work for competitors during and after he or she works for you. In case breach of contract occurs or when your employee plans to resign, clarify your termination procedure in your contract as well.

6. Provide a Signature Area

Lastly, provide a space for your signature area for you and your employees to affix signatures. Let them indicate the date when they signed the company contract to trace when the validity of the contract begins. Have witnesses sign your contract and notarize it for legal purposes. Keep a copy of the contract and give a copy to your employee as well.

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