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Key Employment Contract Elements to Know Before Signing That Job Offer

If you’re in the process of launching a business or about to accept a job offer, here are key employment contract elements to know.

How many times in your life have you been faced with looking at and agreeing to a contract?

In fact, for many people they probably have to respond to a contract more times than they actually realize.

For example, when you get a new phone, you have to agree to the terms and conditions; that’s a contract. When you obtain a loan for a car or a home, you have to agree to the terms and conditions — again, that’s a contract.

Of course, some of these contracts we don’t really think twice about. We probably don’t read all the fine print in that contract for your cell phone. You may read some of the fine print for that contract for the loan on a car.

But there’s one time when you should definitely read all the fine print, and that’s when you have to sign a contract for employment.

Why sign an employment contract?

Not every job requires a contract to be signed, but many offers of employment do. These contracts are intended to outline the rights and responsibilities of each party to the contract — the employer and the employee.

That’s because you are offering something of value and they are compensating you for that task. That creates an agreement and many companies want some sort of legal parameters around it.

Unfortunately, if you’ve only had access to one employment contract, you don’t know what they all look like.

While each employment contract is generally different and individualized to the specific job and employer.

There tend to be clauses and components that are common across contracts, regardless of the type of job and employer.

Essential elements of employment contracts

For example, every employment contract will include a section that addresses the length of the term of employment, as well as the location, hours, and reporting structure. Those are pretty much the basics.

If the employer has any specific goals that you must meet in order to maintain your employment, those will be addressed in the contract as well. This is the Key Performance Metrics (KPI) section.

The KPIs provide you a sense of what is expected from you and the goals to accomplish once you take up the appointment. Your effectiveness or otherwise in the new role would be judged based on how well you meet those KPIs.

Your contract will also outline any particular licensure or educational requirements you must meet in order to maintain your employment.

Pay and benefits, as well as any sorts of insurance or other remunerations to you based on the goals and terms of your employment will also be addressed in the contract.

The employment contract will also have a section that addresses your time off. While this may vary from contract to contract, you can expect the offer to include personal, sick, and vacation time off.

While employed, you may create things of value; what the ownership of those items is will be addressed in clauses in the employment contract.

Related: Understanding Non Disclosure Agreement and Why You Need Them

And if you are let go, there will also be clauses that determine what those grounds are and what happens and is due to you, if anything, should your employment be terminated.

So, there you have a summary of all the essential elements of an employment contract. The graphic below presents a visual representation of everything you need to know.

key employment contract elements you should know
Source: Kira Systems

Originally published on Kira Systems


  • Sam Steve

    Sam Steve is a strategic content marketer and founder of Emira Digital Publishing. He helps clients grow their online presence by writing primarily about digital marketing, SME growth hacking strategies, and productivity. Connect with Sam on social media:

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