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What to include in an employment contract

On Behalf of | Dec 15, 2023 | Business Law

Employment contracts are necessary once you start hiring. They will help your employees understand their roles and the company’s policies. But you need detailed, well-drafted agreements to enjoy the benefits.

Here is what to include in an employment contract:

Job information

A contract should include an employee’s job title, job description (duties), and duration of employment. Most of the information in this clause will be what you included in your job posting. But ensure the details in the agreement are more specific to avoid misunderstandings.


An employment contract typically outlines the days and hours an employee will work. You should also provide information regarding breaks- when an employee will take the breaks and how long they will last.

Compensation and benefits

Your employee-to-be should know how much they will make (annual salary/ hourly rate) and how overtime is calculated from the contract. You should also provide details about benefits, including bonuses, incentive opportunities, health benefits (medical, vision and dental insurance, among others), life insurance, retirement benefits, paid leave and so on.

Time off, sick days, and vacation details

While these elements can be covered under benefits, it’s crucial to have a separate clause with adequate information about their lengths, how one can accrue time off/vacation days and how to ask for time off. 


A termination clause in an employment contract outlines grounds that can lead to a dismissal. This clause helps employees know what to avoid and can protect you from wrongful dismissal lawsuits. 

Severance package

A severance package compensates employees when their employment is terminated, provided they meet certain terms. This clause usually makes employment contracts more attractive.

Dispute resolution

You may conflict with your employee(s) in the future. Having dispute resolution methods in your contract can make your work more manageable.

Seek legal guidance to draft binding employment contracts that will protect you and your employees considerably.