General legal information for the United States, not legal advice. Read the disclaimer

Employment Contract Guide for Small Employers

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A written employment agreement clarifies expectations between an employer and employee. It should comply with wage, hour and discrimination laws and with your state's rules.

Key terms

  • Job title, duties and reporting.
  • Pay, overtime classification and benefits.
  • At-will or fixed term.
  • Confidentiality and invention assignment.
  • Non-compete or non-solicit where lawful.
  • Termination notice and severance.
  • Dispute resolution.

Some states restrict non-competes and arbitration clauses. Employees must be classified correctly. Required policies, such as anti-harassment, should be provided separately in a handbook.

Best practices

  1. Use clear, plain language.
  2. Give the employee time to review.
  3. Keep signed copies.
  4. Avoid promises that conflict with at-will status unless intended.
  5. Have a lawyer review for your state.

For employees

Read it, ask questions and negotiate unclear terms before signing. See our guide to employment contract terms to check.

Frequently asked questions

Do I need a contract for every employee?

No, but written offer letters are wise.

Can I change terms later?

Only with agreement, usually in writing.

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