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Understanding important facts of employee contracts

Employees are essential for the proper function of many businesses. Unfortunately, some business owners do not treat their employees as such.

For that reason, employment laws exist to ensure employees receive fair treatment. Part of that law governs employee contracts, and it is important to understand a few important facts in regards to those contracts.

Reason for contracts

In general, contracts create an agreement between two parties and lays out specific requirements. In the case of employee contracts, they create an agreement between the employer and employee. Though all employers must abide by federal requirements, there are still several elements the employer may choose to include in the contract, which may vary depending upon the industry and position. In any case, before signing the contract, both the employer and employee should have a full understanding of their agreement, including what the employer can expect of the employee while performing the position, and what the employee can expect from the employer while working for the company.


When a job is not required or does not have a certain level of stability, it may be more beneficial for a party to work as a contractor rather than as an employee. Even in such cases, it is still beneficial to have a contract in place to make sure both parties understand the reasonable expectations of such a business relationship. 

Key elements

A few key elements exist that any employment contract should include. Lunch breaks and rest periods should be detailed in the contract, depending upon the hours the employee works each day. If the employee is able or restricted from obtaining overtime, the contract should detail this fact. Also, if required or prohibited actions exist, the employer should include them in the contract.

The first step in exercising your rights is understanding what they are. Consider how these and other employee rights affect your current or future work situations.

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