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Essential topics to address in your employment contract

On Behalf of | Jan 14, 2021 | Business Law

Implementing an employment contract for your organization can help you protect your company’s best interests. At the same time, a well-written agreement can incentivize your employees to remain loyal to your company. 

Employment contracts can function as a point of reference in addressing common questions that may arise between you and your employees. A periodic review of a contract’s policies can guarantee that your agreement remains updated to reflect best practices within your industry. 

Topic organization

When developing an employment contract, think about what information you feel your employees must have to understand their role within your organization. Clarify your expectations and provide context about disciplinary actions for lackluster performance. According to Chron, some critical components to address within your contract include the following: 

  • Pay structure including bonuses and commission 
  • Elements of a job and its impact within your company 
  • Benefits packages including health insurance, retirement and workers’ compensation 
  • Duration of the contract 

Employee training

It is not enough to assume that because your employees have a copy of the employment contract in hand, they have read and understood its content. During the hiring process, explain the key components to prospective candidates and leave time for questions and discussion. Even in periodic employee training, consider revisiting the employment contract to remind your workers of its relevance to their relationship with the company. 

A well-written employment contract can protect your company from conflict of interest such as one of your employees leaving your company to work for a competitor. You can include a non-compete clause which will clarify at which point you will allow a former employee to seek work at a competitor’s company. Discussing these provisions in employee training is an effective way to remind your workers of their commitments to your company. 


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