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10 Key Things to Consider in Creating an Employment Contract

10 Key Things to Consider in Creating an Employment Contract

An employee agreement is a legal document detailing some aspects of the working arrangement between an employer and an employee. The terms and conditions of employment before the employer and employee enter into a partnership are specifically defined by such aspects. Additionally, both the employer and the worker will benefit from these terms and conditions.

A trained employment lawyer who specializes in employment law fields, such as contracts and handbooks, will assist you in drafting and interpreting an employment contract.

Although almost everything that the employer and employee can and should demand from each other can be included in these contracts, below are some of the most basic elements of any employment contract.

1. Compensation and advantages 

Outline the package of compensation and benefits. The annual wage or hourly rate, information on promotions, bonuses, or benefits, and how these can be achieved should be included.

Explain what the incentive package entails, what percent the company pays, and what percent the employee pays. Medical, dental, eye care, etc. Include details on the 401(k) account, stock options, and any fringe benefits, if offered.

2. A privacy policy on technology 

Clarify what’s OK and what’s not about social media and email use on corporate property. For example, if you don’t want workers to update their social media accounts using company computers or mobile devices or check personal email, say so. Most free employment contract samples are accessible on the CocoSign website.

CocoSign is a reputed brand that offers its users access to 800+ various contract templates, agreements, leases, & a lot more. One cannot only use it to access these contracts but also sign them online safely.

If you don’t want workers to say something derogatory about social media jobs, as those two employees of McDonald’s did, ban it.

 10 Key Things to Consider in Creating an Employment Contract

3. After termination conditions 

After leaving the company, the contract should contain any conditions or mandates on an employee. For instance, in a given period, an employee might not be able to start his or her own company in the same industry within the same locale or operate separately with the customers of the business. Clearly, to help protect the company and its customers, describe these terms.

Although these essential elements are a good starting point, you can add several other items to better describe the position of the business relationship. Using a digital template to help direct you, to ease the writing of the contract. Your new employer will be on board in no time with a smooth creation and a paperless signing process.

4. Termination terms and conditions

Agreement about how termination will work. First, enter the amount of notice needed by each party to provide to terminate jobs. This notification may be dependent on periods of employment or can be at will.

Explain what is required, including the amount of notice required and whether it should be written, for any party to end the relationship.

All potential reasons for termination should be specified in the staff free contracts at CocoSign. Explain what is required, including the amount of notice required and whether it should be written, for any party to end the relationship.

5. Agreement on confidentiality 

By making the employee sign a confidentiality agreement within the contract, to protect sensitive information such as company trade secrets and consumer data. Instead of making this a separate contract or piece of paper, include it as a part of the job contract and put an area in the section where it is possible to digitally sign new hires.

6. Payments for Bonus 

If a bonus payment in addition to your salary has been offered to you, this should also be included in your contract. Thus, the employer will be obligated to pay your bonus.

Bonuses are provided based on personal goal agreements and/or depending on the success of the business. The contract will govern target agreements, but this does not have to be the case. It is normal for these regulations to be received separately.

 10 Key Things to Consider in Creating an Employment Contract

7. The salary 

Of course, you should already be aware of your salary before getting the contract. Either the monthly or yearly amount will be specified by the contract. When you are to earn your paycheck, it should also say.

Benefits such as Christmas bonuses, holiday bonuses, or profit-sharing should also be specifically regulated without room for interpretation, as well as other bonuses such as dividends. Your classification must be called if you have a collective bargaining agreement.

8. Ownership Agreements

Simply put, an ownership agreement means something that the employee creates when the employer’s employee becomes the business’s property.

9. Classification of Workers 

To ensure tax and insurance enforcement, define whether the recruit is an employee or contractor. Because of job misclassification, Uber has faced several lawsuits and continues to tackle it. Learn what separates workers from contractors and correctly identify employees from the start so that you don’t have to worry.

10. Employee Duties

The section outlining employee responsibilities is one of the most diverse aspects of an employment contract. This is because every position is different, so the standards for each role vary. For example, the employee duties of a construction contractor are not the same as the responsibilities of a salesperson.


An employment contract offers you security and, especially during bad times, should be beneficial to you. That’s why studying all aspects closely before signing pays off. If the contract does not address anything you have agreed to verbally with your potential boss, you should not let it confuse you.

Companies also use regular contracts that are sent out automatically without any modifications by the HR department. There is no bad intent involved in most situations, but merely bureaucratic hurdles. As a result, you can guarantee that all your questions are answered and that all you were promised is registered in writing.