Overview of Employment Agreement


What is this document?

An Employment Agreement is used to establish the relationship between an employer and an existing or new employee. It includes the obligations of both parties.  


When would I use this document?

This document could be used either for a new employee or to change the terms of an existing employer/employee relationship.  


Who signs this document?

Employment Agreements are signed by the new or existing employee and an individual with authority to bind the employer to the agreement. The Employment Agreement should be signed after the employee has had a chance to look it over, and before the employee begins work.


More details about this document

Employment Agreements can range in length and complexity depending on the context it is drafted for. An employee will sign an Employment Agreement when starting a new position with an employer, and then periodically when the terms of their employment relationship evolve over time (eg. changes in position, compensation, vacation benefits, stock options, etc.).

Employment Agreements often refer to company policies or benefits plans.


What are the core elements of this document?

The core elements include: parties, duties and responsibilities, reporting line (who employee reports to), compensation and benefits, reimbursements and allowances, work hours/schedule, annual leave allowed, benefits, performance reviews, settlement of disagreements, termination clause, non-solicitation and non-competition clauses, limitation of employee activities, and intellectual property and confidentiality clauses.

Some examples of additional clauses include ownership of intellectual property, non-disparagement, terms of departure, limitation of liability, employee stock option plan, return of employer property and indemnification of the employee.


Related Documents

Nondisclosure/Confidentiality Agreement – an agreement that protects confidential information

Contractor/Consulting/Services Agreement – this type of agreement can have various names, and is used when a person is paid to provide services but is not hired as an employee. Payment can be flexible eg. money, shares or some other form of compensation.

Intellectual Property Transfer, Assignment and Release – an agreement that transfers the intellectual property from one person to another eg. from a consultant/contractor or employee to the person who ‘hired’ the consultant/contractor or employee

Workplace Harassment Policy – this policy deals with harassment in the workplace

Romantic Relations in the Workplace Policy – this policy deals with romantic relations in the workplace

Drug and Alcohol Policy – this policy deals with drug and alcohol use in the workplace and the procedures to follow if unauthorized use is suspected


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