What is an employment contract?

If you are considering a new job, you may be wondering what an employment contract is. If you already have an employment contract, you may have concerns related to enforcing it. In general, an employment contract is a written agreement between an employer and an employee. Most employment arrangements are at-will arrangements that do not involve an employment contract. In an at-will employment relationship, the employer can fire the employee at any time provided it is not illegal or subject to certain limitations. When there is an employment contract, the terms of employment are largely governed by the agreement.

At times, an employment contract may be claimed through verbal agreements, employer policies or an employee handbook. Employment law, and concerns related to employment contracts, can be particularly complex. Employment contracts may commonly include provisions related to compensation; health benefits; vacation and sick leave; procedures if an employee has a grievance; and what happens following the termination of the employment relationship. Additionally, employment contracts may include provisions related to nondisclosure or noncompetition.

It is important when entering an employment contract to fully understand the terms, obligations, rights and responsibilities of the contract. Likewise, it is important to know how to respond if an employment contract has been breached by either the employer or employee. Parties to an employment contract should be familiar with how to respond in the event of a contract dispute and how to enforce an employment agreement when necessary.

Employment contracts can be complex documents but can be exceptionally important to an employee and their job security and stability. It can be helpful to have trained guidance when signing an employment contract as well as in circumstances when the terms of an employment contract may have been violated.

Source: Employment.findlaw.com, "Employment Contracts and Compensation Agreements," Accessed July 25, 2017

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