An employment contract is a document that is signed by the employer and employee and spells out the terms of the relationship between the two. The majority of states honor at-will employment, meaning an employee can be terminated without cause. While employment contracts do not override at-will employment laws, they can provide a sense of security for employees as well as employers and help foster a sense of loyalty between the two.
The employment contract describes the responsibilities and expectations of the employee as far as the job they are being hired to perform, and the compensation and benefits the employer will provide in return. The contract can include information regarding the following:
There are many other considerations that can be placed into the employment contract. The main advantage to the employment contract is that it limits the ability of both the employer and the employee to terminate the employment. This is a good tool for employers especially when a great deal of time and money is invested in the training of the employee in order to perform their specific tasks. It is advantageous to the employee because it guarantees their employment for a certain period of time as long as they abide by the terms of the agreement.
While no contract can force an employee into remaining with a company indefinitely, the employment contract usually will stipulate a pre-set length of employment the employee is committing to. If the employee wishes to leave the company prior to that time period, many employment contracts provide specific criteria for giving notice and lock the employee into as much as a 90-day notice in order to give the company proper time to find a replacement.
Generally, employment contracts are most useful for enticing quality employees to commit to working for the company for a certain amount of time. Employment contracts provide security and a guarantee in writing for the employee and add much more stability to a skilled employee’s career path than if they choose to work for a company that offers little more than a paycheck.
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