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.
Legal compliance
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
- Use clear, plain language.
- Give the employee time to review.
- Keep signed copies.
- Avoid promises that conflict with at-will status unless intended.
- 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.