When a business is just getting started, it’s critical to have crucial documents drafted correctly. One of the most important of these documents is an employment contract. It creates a legally binding agreement between an employer and employee, outlining their individual rights and duties. Negotiating and drafting a solid employment contract can be a real challenge. If you’re an executive in the New York area, UpCounsel’s team of experienced business lawyers can help you get the best counsel and legal advice that understand the local regulations.

An employment contract should not be taken lightly. Without a correctly drafted contract, your business might face possible litigation with employees claiming they weren’t paid correctly, or their job duties and wages weren’t in line with what was promised in the contract. Moreover, by having an employment contract in place, it’ll be much easier to handle any potential disagreements down the road.

There are several things that should be included in an employment contract. It’s essential to be mindful of the details, as all points through the agreement should be abundantly clear. Additionally, it’s important to keep the document up-to-date as regulatory changes can necessitate contract adjustments.

Types of Employment

The first step of crafting an employment contract is to determine the type of employment for the individual. When drafting an agreement, it’s important to identify which position the employee is filling—full-time, part-time, temporary, or consulting. This should be clearly articulated in the contract in order to ensure everyone involved is on the same page with regards to job duties, responsibilities, pay, and other details.

Job Duties

Once the type of employment has been established, it's important to outline the specific roles and responsibilities of the job in question. The contract should spell out which tasks and duties an employee is responsible for and how the performance of those is going to be measured. It’s also essential to include expectations of the employee, such as any applicable professional certifications or licenses they may need to qualify for the position.


The compensation structure of any agreement should always be discussed in depth. It’s important to make certain the salary, including rate of pay, overtime policies, bonuses, and other financial incentives, such as stock options, should all be discussed in the contract. Most contracts also designate a minimum period of employee performance for a specified set of wages or a guarantee of wages prior to a probation period.

Moreover, many employers include provisions in the contract that allow wage deductions for uniform maintenance, parking, or other company provisions. Be sure any deductions are stipulated in the contract.


An important part of employment contracts are often perks and benefits packages. Many companies offer 401Ks or health benefits to their employees. It’s important to include language in the contract regarding any benefits the employee will be entitled to and how long they must work in order to be eligible for them.

Benefits also address vacation and sick days for an employee, as well as other possible family leave programs. Include any pertinent information regarding employee holidays, premiums, and pension.

Intellectual Property

Intellectual property is the heart of many companies—ensuring it is adequately protected is an essential part of properly drafting an employment contract. Ownership of any work done by an employee should be established by contract. Any work done while employed by the company should belong to it, unless otherwise specified in the agreement.

The contract should also state how the employee should handle and protect confidential and proprietary information. This protects both the company and the employee from possible litigation.

Modifications to the Contract

Finally, it’s important to establish provisions for any future changes or modifications to the contract. State whether the contract can be modified without the consent of the employee, or if any modifications must receive the employee’s signature before it’s legal. Establishing these parameters makes future changes to the agreement much simpler.

Creating a legally enforceable agreement does not have to be a difficult process. The experienced attorneys at UpCounsel have extensive experience guiding businesses and corporations of all sizes and industries through complicated legal matters. We know that proper preparation is key to success, so let us help ensure the contract you create is comprehensive and satisfies the needs of both the employer and employee.


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