How to Write an Employment Contract

If you’re hiring someone new or taking on a new job yourself, the only way to prevent misunderstandings and to assure that both the employee and the employer are on the same page is to write up an employment contract. From duties to benefits, an employment contract outlines everything an employee needs to know to understand his role, responsibilities and compensation package, and to successfully meet the expectations of the employer.

State who the contract is between. Include the contact information for both the employee and the employer. Be sure to list the legal name of both the employee and the employer or business and to confirm that the address, phone and email addresses for each party is up-to-date and complete.

Outline the terms and conditions of employment. The terms and conditions listed should include the dates of employment, compensation, position and duties. The more specific you are in your employment contract the less likely you are to have any misunderstandings later.

Explain the policies and procedures for requesting vacation time, reimbursements, taking sick days or leave. Instruct the employee who to speak with and list any forms that must be completed. Also state how far an advance requests for time off should be submitted.

Add any specific agreements, statements or clauses. If you require your employees to sign a non-disclosure agreement, privacy agreement or a statement promising that this work will be the only work the employee takes on during the length of the contract, include these statements within the work contract. Require the employee to write her initials beside each statement.

Provide information on insurance benefits including health insurance, dental insurance, disability insurance and any other insurance you offer. Be sure to clearly state the benefits for each type of insurance.

Outline how the agreement can be terminated. Include information on firing for cause and non-cause and the procedure for giving notice. Outline any severance packages you offer.

Sign the employment contract. For the contract to be executed, be sure both parties sign the contract. Be sure to state that oral modifications of the employment contract are not binding.


  • Having the employee initial the bottom of each page will demonstrate that the employee has read each page of the contract. Provide time for the employee to review the contract before signing. This will give the employee a chance to review and ask questions. Keep the original copy for yourself in a secure place.


  • Failure to draft a detailed employment contract can cause issues down the road. Having a contract provides both parties a tangible document to go back to so that what was agreed on can be reviewed.