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What should be included in an employment contract?

Your employment contract governs the terms of the employee-employer relationship. The employment contract should, therefore, cover a wide variety of areas, from the benefits the employee can expect to receive to the terms and conditions by which a termination of employment may occur.

For a more thorough review of the most necessary points to include in an employment contract, take a look at the following list:

  • The term or period of employment: How long will the contract last? Will it be indefinite, or does it have a specific period of years that it will endure before it needs to be renegotiated?
  • The responsibilities assumed by the employee: This largely refers to work duties and work expectations
  • The types of health, life insurance and disability insurance benefits the employee can expect to receive
  • Policies that govern sick days and vacation time
  • Conditions under which a termination of the employee will occur
  • Noncompetition clauses that limit the ability to the employee to compete against the employer after terminating employment
  • Nondisclosure agreements that pertain to client lists and company secrets
  • Ownership agreements that pertain to the materials that the employee produced. Usually, these clarify that such materials belong to the company
  • Directions for how disputes must be resolved -- usually through mediation or arbitration

Since every employment contract is different, yours might not include all of the items above and it could include other important items that pertain specifically to the employees unique working relationship. To fully understand the terms of your contract, you may need learn more about Michigan employment contract law.

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