ContractsCounsel Logo

Understanding Employment Contracts

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 7,608 reviews
Home Blog Understanding Employment Contracts

Jump to Section

Need help with an Employment Contract?

Create a free project posting

Employment Contracts: Key Elements You Need To Know

Crafting employment contracts requires a delicate balance. As an employer, the language used needs to protect your business. At the same time, it needs to respect the rights of the employee. Contract lawyers approach these agreements with the goal of equitably serving both parties. To do this, they ensure that the following critical elements are always included.

Description of the Position

This clause of the contract needs to spell out what position the employee is meant to fill, including all their essential duties and job requirements, as well as the locations where they will be working and the hours of employment. The language here should be kept as brief as possible without sacrificing clarity. The employee should be able to read this description and fully understand your expectations of them.

Performance Metrics

While the position description should let the employee know what they are expected to do, it should not get into how performance will be evaluated. This should be addressed in a section on performance metrics. Consider things like skills you want to see develop during their employment, sale volume expectations, and how you will measure growth.

Length of the Agreement

An employment contract must have a start date to specify at what point the employee will be held to the terms of the agreement. It is also critical to have either an end date to the contract or a renewal date. Since your needs and the needs of your employee will change with time, you should not opt for an open-ended contract.

Terms of Compensation

For the employee, the terms of compensation are easily the most critical element of the employment contract. The base wage should be specified as well as whether it is salaried, hourly, or commission. Overtime policies should be clarified here as well. If you have an incentive program, it is also a good idea to outline it here.

Employee Benefits

Outline everything included in your employee benefits package. This should include sick days, holidays, vacations, stock options, profit sharing, retirement savings, and insurance. When it comes to insurance coverage, be clear on the percentage of premiums the employee must cover. If there are any stipulations to coverage, such as laving specific licenses, paying dues, or maintaining a membership, clarify who pays for these and when they must be paid.

Termination and Severance

Not every employee is going to be a good fit for your company. That is why your contracts need to specify how termination and severance is handled. Outline what will happen is the employee is let go with cause and without cause, explaining the severance terms for each possibility. Also go over specific instances that constitute cause for termination.

Getting Help From Contract Lawyers Near You

The best way to ensure your employment contracts are iron-clad is to work with a contract attorney. Contracts Counsel is a boutique marketplace that allows you to get quotes from vetted attorneys who grasp the nuance of your industry. Work with for legal assistance that doesn’t break the bank.

Need help with an
Employment Contract?

Create a free project posting

Meet some of our Lawyers

Charlotte L. on ContractsCounsel
View Charlotte
4.6 (2)
Member Since:
February 25, 2021

Charlotte L.

Self-Employed Legal Consultant
Free Consultation
Arlington, VA
9 Yrs Experience
Licensed in DC, VA
University of Virginia School of Law

I hold a B.S. in Accounting and a B.A. in Philosophy from Virginia Tech (2009). I received my J.D. from the University of Virginia School of Law in 2012. I am an associate member of the Virginia Bar and an active member of the DC bar. Currently, I am working as a self-employed legal consultant and attorney. Primarily my clients are start-up companies for which I perform various types of legal work, including negotiating and drafting settlement, preparing operating agreements and partnership agreements, assisting in moving companies to incorporate in new states and setting up companies to become registered in a state, assisting with employment matters, drafting non-disclosure agreements, assisting with private placement offerings, and researching issues on intellectual property, local regulations, privacy laws, corporate governance, and many other facets of the law, as the need arises. I have previously practiced as an attorney at a small DC securities law firm and worked at Deloitte Financial Advisory Services LLC. My work experience is dynamic and includes many short-term and long term experience that span across areas such as maintaining my own blog, freelance writing, and dog walking. My diverse background has provided me with a stong skill set that can be easily adapted for new areas of work and indicates my ability to quickly learn for a wide array of clients.

Sunnita B. on ContractsCounsel
View Sunnita
4.9 (30)
Member Since:
March 29, 2022
Rachel C. on ContractsCounsel
View Rachel
4.9 (3)
Member Since:
August 1, 2023

Rachel C.

Contract Attorney
Free Consultation
St. Louis, MO
3 Yrs Experience
Licensed in MO
St. Louis University

Contract attorney who enjoys empowering individuals and businesses with contracts that stand as a fortress against potential disputes and uncertainties. Find peace of mind with prepared agreements ensure that your agreements are enforceable and aligned with your long-term objectives.

Ralph S. on ContractsCounsel
View Ralph
5.0 (4)
Member Since:
October 31, 2021

Ralph S.

Free Consultation
Gainesville FL
12 Yrs Experience
Licensed in DC, FL, MA
University of Florida Levin College of Law

Ralph graduated from University of Florida with his JD as well as an LLM in Comparative Law. He has a Master's in Law from Warsaw University , Poland (summa cum laude) and holds a diploma in English and European Law from Cambridge Board of Continuous Education. Ralph concentrates on business entity formation, both for profit and non profit and was trained in legal drafting. In his practice he primarily assists small to medium sized startups and writes tailor made contracts as he runs one of Florida disability non profits at the same time. T l Licensed. in Florida Massachusetts and Washington DC this attorney speaks Polish.

Rodrigo M. on ContractsCounsel
View Rodrigo
5.0 (1)
Member Since:
November 2, 2021
Melanie C. on ContractsCounsel
View Melanie
Member Since:
October 31, 2021

Melanie C.

Business & Intellectual Property Attorney
Free Consultation
19 Yrs Experience
Licensed in NJ, NY
Emory University School of Law

Melanie Cunningham specializes in helping entrepreneurs remain creative and expansive by establishing the foundation of their business and protecting and maximizing their intellectual property. It’s her belief that entrepreneurs and micro and small business owners play a critical role in our communities, which propelled Melanie to return to private practice after more than a decade working for global financial institutions. Melanie’s practice is dedicated to delivering excellent legal support and protection to this vital, but an often underserved, community. Melanie credits her business training and the skills developed as a senior compliance officer with enabling her to help small business owners have a legally compliant business, while proactively advising clients during the growth process. She’s helped diverse entrepreneurs do business in a way that focuses more on collaboration than competition. Melanie has counseled small business owners in determining what is protection worthy (helping them obtain trademarks and copyrights) and making contact on their behalf in the case of infringement.

Christopher B. on ContractsCounsel
View Christopher
Member Since:
November 1, 2021

Christopher B.

Free Consultation
Charleston, SC
10 Yrs Experience
Licensed in SC
Charleston School of Law

Former litigator now focusing on transactional business work

Find the best lawyer for your project

Browse Lawyers Now
Learn About Contracts
See More Contracts
other helpful articles

Need help with an Employment Contract?

Create a free project posting

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city