1. Features of Contract of Employment Overview
2. Features of Contracts of Employment

Features of Contract of Employment Overview

Features of contract of employment are those details which should be, or are often included, in contracts of employment to adequately define what is expected of the employee and the employer. Every work relationship will be governed by a contract of employment, and although it is not necessary for an employment contract to be given in writing, it is highly recommended, and those that are written should cover certain basic details to be effective.

Features of Contracts of Employment

If a written contract is made for employment, details that should be covered or are often covered in it may include:

Parties involved. This will be the employer and the employee, the identity of which will usually be stated at the beginning of an employment contract. This is an essential detail to any contract.

Job information. Basic information about the job, including its title, department (if any), supervisor (if any), and performance evaluation criteria should be covered.

Benefits and compensation. How an employee will be compensated for their work should be covered, as well as what non-salary benefits they may receive, if any. Compensation could include wages, salary, and bonuses. Benefits could include medical plans, including dental and eye care; vacation allowances; profit-sharing; stock options; 401k matching; and vehicle and travel allowances. How and when these may be received should be defined.

Employee classification. Whether an employee is full-time or part-time should be detailed, as well as if an employee can offer services to other employers or be self-employed. A worker’s status as employee or contractor is also important to define for insurance and tax purposes.

Employment schedule and period. Whether an employee’s period of employment will be for a set term or ongoing should be stated. The hours of employment and whether they are flexible is valuable information related to this topic, as well as if remote employment is an option. Whether overtime will be required should also be covered.

Non-compete clauses. A non-compete clause is an agreement that states that an employee will not work for a direct competitor of their employer for a certain period of time after they have left their employer. This could include starting their own business in the same industry, as well. The purpose of such clauses is to prevent employee poaching, although if a clause is so restrictive in scope that it renders the employee permanently unemployable, it will be difficult to enforce.

Confidentiality clauses. A confidentiality clause (sometimes also called a non-disclosure agreement, or NDA) binds an employee to not disclose to third parties sensitive information, such as client data and trade secrets. This provision can be included in a contract for convenience’s sake, and it is highly recommended for companies whose value is derived in great part from processes or data exclusive to them.

Technology privacy policy. Since the digital world is now a part of day-to-day life, clarifying what is and is not acceptable social media behavior will, in most cases, be important. This may be limited to employee’s use of company computers or company time, but it may also extend beyond that, as an employer may argue that an employee’s behavior off-work could reflect poorly on the company, thus diminishing company reputation and value.

Work product. A contract will often address ownership of products or ideas produced while an employee is under contract. Usually, this ownership will revert to the employer, especially if the product or idea was created on company time or with company resources.

Termination. Under what conditions an employee may be terminated should be set out clearly. If an employee must be terminated “with cause,” this means some action must have been taken to warrant termination. This could include illegal activity, theft, deceit, violence, or harassment. If an employee may be terminated “without cause,” then unacceptable action is not necessary to warrant termination, and termination may occur for any reason.

These are just some of the issues and details that may be covered in an employment contract; others may be included as are deemed necessary for the proper execution of the contract. If you need help understanding features of contract of employment, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.