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How To Draft An Employment Agreement

An employment agreement is a detailed document drafted by an organization that clearly states the responsibilities, roles, and terms and conditions for both parties. This document is not binding until signed by both parties (employer and employee), meaning that a breach in the contract can result in a legal war. An employee agreement draws a clear line between the concerned parties, paving the way for a seamless work relationship.

Importance of an Employment Agreement

You can’t overemphasize the importance of this agreement. Employers and employees who do not have a defining contract will most times be at loggerheads when certain expectations are not met. In other words, it will result in a conflict of interest. An employer’s purpose for drafting this document is to protect his business while an employee’s purpose for signing the contract is to protect his or her work interest. While an employment agreement is binding, there is always a provision for both parties to amend the document should they disagree.

Drafting the Employment Agreement

As an employer, you need to map out specific business areas that you wouldn’t want an employee to affect. Therefore, it is necessary to state them in a document that keeps you and your staff members in check. The following steps will guide you towards drafting such a contract.

Legal Assistance

Seek out the advice of a lawyer since this contract will be legally binding on both sides. Drafting the employee agreement by yourself won’t guarantee the best results since a lawyer’s involvement would ensure that the document covers essential issues within the legal framework.


Addressing the responsibilities of both parties will prevent headaches on both sides. Employee expectations should be clearly stated so that both the employer and the employee are clear on what the employee needs to do. This also ensures that both parties can be held accountable should any fail to perform his or her responsibilities.

As an employer, you want your employee to remain within the boundaries of his or her job description. You don’t want a secretary with a job description to that effect to run domestic errands for you. This is an abuse of power. Considering the current nature of the litigious society we live in, it is important for all employers to always fulfill their part of the contract to avoid litigation.

Company’s Policies

Stating company policy for your employee will help shape the employee’s workplace attitude and approach to everything. These policies are usually put together by management.

Policies direct the company towards its vision. All employees should understand these goals.

Privacy Standard

No organization wants to bring on board a staff member who cannot keep the secrets of the organization. Organizations need to protect their trade secrets from competitors. The employee agreement should outline the areas of sensitive information that should not be disclosed to non-staff members or competitors. Some employers create a different NDA (Non-Disclosure Agreement) to this effect, to protect the business.

Non-Compete Agreement

Some organizations also include the non-compete agreement. By this, an employee agrees not to start up a similar business or work for a competing firm. The aim of covering this is to protect the company from undue competition by someone who knows the nitty-gritty of the business and has had access to their strategies, marketing skills, and even their customer base.

Remuneration, Compensation and possible raise

One of the key deciding factors for a potential employee to accept your job offer is end-of-day pay. Including compensation information is vital to your employee contract.

Working hours

Working hours are a tricky area when it comes to this agreement, as many employers tend to work beyond resumption and closing hours. There’s no guarantee an employee will be pleased with the idea of working past the appointed work hours. So it should be addressed, whether overtime attracts extra pay or not.

Sick Leave

No matter the good health of a person, there are times when they may fall ill. Cover sick leave first thing rather than negotiating it when it arises. In drafting the agreement, you should state whether or not the employee is entitled to sick leave. If entitled to sick leave, will it be paid or not?

Notice of Resignation

To protect your business or company, you need to state the period of notice an employee needs to provide in case they choose to leave the company. You should also include the penalty for failing to give the required notice before resignation.

Annual Leave

The terms and conditions associated with annual leave should be included and clear to both parties. An employer may deny an employee’s annual leave application if that person is so indispensable, and whose absence may significantly affect the company. Both parties need to acknowledge this area to prevent conflict.


This aspect is entirely up to the employer to include when drafting the agreement. You should state actions or reasons that can result in their termination so that your employees know where not to cross the line.

Final Verdict

There are several other subjects you might want to address in the document, just think it through. If you can find a lawyer to go through the employment agreement for you, do so. Do not leave gaping legal loopholes in the phrasing of the agreement. After a tough search to find the right employee, it is best to also protect yourself from litigations. Also, employees who have employment agreements will be better motivated; they will make better decisions because they know what to expect from you.

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By Michael Faraday

Michael Faraday holds degrees in English education and creative writing. As an educator, Michael specializes in corporate training having worked with IBM, Philip Morris International, and the Danone food company in Paris. He is a published author and is deeply passionate about the written word.

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