An “employment contract and compensation agreement” establishes the terms of an employment relationship between the worker and employer. Although such a contract is not required for all employees of a particular business, an employment contract and compensation agreement is often used when establishing the terms associated with hiring someone into an executive-level position.
Here are some of the features associated with a typical employment contract and compensation agreement:
— A clear description of the employee’s role.
— How the employee will receive compensation for his or her role.
— The grounds for terminating the employee.
— The claim of the employer over the work results of the employee.
— Detailed descriptions of the employee’s work responsibilities.
— A clause that protects the employer’s trade secrets and client lists.
— How long the employment relationship will last.
— How to resolve disputes that happen relating to the employment agreement.
— Noncompetition limitations following the departure of the employee.
— Benefits that the employee shall receive like time off, sick leave, disability leave, health insurance and other work-related perks and bonuses.
Because a written employment contract and compensation agreement is a contractual agreement, potential employees and employers should be careful when laying out the terms of such agreements. It’s vital, for example, to fully review and understand the agreement before signing it — and to make sure that you are satisfied with the implications of the agreement.
If you have questions about an employment and compensation contract that you’re about to sign — or that you have signed in the past — you can learn more about employment contract law by visiting our website now.