Employment contract

An employment contract is an agreement entered into between an employer and an employee at the commencement of the period of employment and stating the exact nature of their business relationship, specifically what compensation the employee will receive in exchange for specific work performed.

Related Topics:
Agreement - Employer - Employee - Employment - Compensation - Work

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The central focus of most employment contracts is money. The employee may be compensated through wages, a salary, or by commission.

Related Topics:
Money - Wage - Salary - Commission

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In addition to monetary compensation, the employment contract often specifies a fringe benefit package, including a retirement plan, employee stock options, the termination or resignation notice period, holiday entitlement, required hours of work, and (especially in the US) health insurance benefits.

Related Topics:
Fringe benefit - Retirement plan - Employee stock option - Holiday - Health insurance

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Some of the more draconian contracts also prohibit employees from ever joining a competing company or disclosing trade secrets. Some even go so far as preventing the employee from disclosing any details about the contract itself. The employees have no choice as the company will often refuse to remove such draconian protectionist clauses from the contract. Companies often form a cartel that forces these conditions upon workers by harmonising their contracts, so there are no alternative companies to work for should the potential employee have a problem with certain parts of the contract.

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