Byron Carlson Petri & Kalb, LLC | attorneys at law

Essential components of a good employment contract

On Behalf of | Jan 4, 2022 | Business & Commercial Law

A new job offer can be very exciting. Whether it is your first job, an opportunity to take on a new role or quitting the tiresome job hunting process, chances are you look forward to signing on that dotted line and getting started. But before you get there, do you understand what makes a good employment contract?

An employment contract is a legally binding document between the employer and the employee. This contract outlines each party’s rights and responsibilities. Each party signs the document voluntarily and without any form of coercion. While there is no standard template for employment contracts, there are certain key terms that must be included in every contract. Here are some of them:

Parties to the contract

This is, perhaps, the most important component of any contract. Every employment contract must contain the names and addresses of the parties to the contract. Additionally, it may contain a description of the business.

Details about the role

The contract should also contain information about the job as well as the duties and responsibilities associated with it. Some of the crucial information about the job may include:

  • The job title and description
  • Team and/or department of deployment
  • Role and skill requirements

Some contracts may also contain information on how performance appraisal will be conducted.

Remuneration and benefits

One of the most components of an employment contract is the remuneration and benefits clause. This clause contains the following information:

  • Payment amount and terms (hourly or monthly)
  • Employee benefits

A sound employment contract should also indicate when an employee will be paid for work done. Some contracts also specify employee classification (contract, freelance or permanent and pensionable) in this section.

When it comes to employment contracts, the devil is usually in the details. A good employment contract puts the employer and the employee on the same page and minimizes some of the common employment disputes.