An employment contract benefits both you and your employee

On Behalf of Dunlap Fiore, LLC |

Some employers welcome a new hire aboard with little more than a handshake and a standard agreement. However, a contract provides benefits a more casual approach lacks.

An employment contract contains essential details that will protect your business and ensure that the new employee knows what to expect.


Provide the new hire with a clear description of the job. Include the name of the position, the location, hours of employment and essential duties.

Performance requirements

Note skills the position requires and performance requirements. If the job is in sales, outline production goals and revenue enhancement opportunities.

Compensation details

Make compensation clear. Specify whether the new hire can expect a salary, a commission or an hourly payment. Describe the overtime policy and state the objectives of any incentive programs the company offers.

Company benefits

Spell out the company benefits package including healthcare, dental or vision plans. State any percentages the employee must pay in order to receive coverage. This is also the section in which to address profit sharing, retirement plans, stock options and policies concerning holidays and vacations.


An employment contract must also address the subject of termination. Clearly explain what occurs if the employee is terminated with or without cause as well as the severance terms that apply.

Length of agreement

The employment contract should contain a section about the length of the agreement and include conditions that apply in order for you or the new hire to extend, reduce or cancel the term of the contract.

Benefits both ways

You no doubt have expectations for the people you hire, and you want to establish a suitable employer-employee relationship right from the start. An employment contract provides a new hire with an essential comfort level and, at the same time, helps you protect your business interests.