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Work for Hire Clause: Anything created by the employee at work belongs to the company.Termination: The reasons why the employment relationship may be ended.Probationary Period: A period of time where the employee is essentially “on trial” and may be terminated if deemed unsuitable.Benefits: Details about disability protection, health insurance, vacation, sick days, paid time off (PTO), maternity leave, and any other benefits.For example, you may have all new employees sign a 1-year employment contract with an option for extension upon review. Term: Indefinite or fixed amount of time the employee is expected to work.Start Date: When the employee will start working for the employer.Compensation: Amount of money paid per hour, week, or month, including any overtime, bonus(es), or commission, and the compensation schedule.Position: Title and description of employee’s role/s and responsibilities.Employer: Name of the company hiring the employee.Employee: Name of person being hired to work.Important Terms to Include in Employment ContractsĪn employment contract will identify the following essential elements: Some of the most popular types of employment contracts include:Ĭreate a contract between a company and a contractor with an independent contractor agreement. There are various different types of employment contracts to accommodate the different employment statuses of individuals. IRS Form W-9 – To be completed by independent contractors at the start of employment (if more than $600 is to be paid for services or labor).

IRS Form W-4 – To be completed by employees at the start of employment.If you’re a US company hiring citizens and residents, there are IRS requirements you need to follow: For example, the set of functions an employee will perform and the wages the employer agrees to pay in return.Īs a reference, people also refer to an employment contract as:īefore issuing an Employment Agreement, you should request that the candidate provide an Employment Verification Letter to verify their income and employment history.

The contract of employment outlines the rights and responsibilities of both parties for the duration of employment. An employment contract recognizes a legal business relationship between an employer and an employee.