How to Write an Employment Agreement

Structure employment agreements with clear compensation, duties, and termination terms to protect your business and reduce disputes.

1. Define compensation and benefits structure. Specify base salary, bonus structure, equity grants, and benefit eligibility with clear calculation methods. Include overtime eligibility for non-exempt employees and detail when raises or bonuses are reviewed. Set payment schedule and expense reimbursement procedures.
2. Outline job duties and reporting structure. List primary responsibilities, performance metrics, and reporting relationships. Include language allowing duty modifications as business needs change. Specify work location, remote work policies, and required hours or availability windows.
3. Establish termination procedures and notice periods. Define at-will employment status where applicable and required notice periods for voluntary termination. Detail severance calculations for layoffs and final paycheck timing. Include procedures for returning company property and transferring responsibilities.
4. Include confidentiality and intellectual property clauses. Require protection of trade secrets, customer lists, and proprietary information during and after employment. Assign work product and inventions to the company. Specify duration of confidentiality obligations and consequences for violations.
5. Add non-compete and non-solicitation terms where enforceable. Include reasonable geographic and time restrictions on competing businesses and employee solicitation. Check state enforceability laws — many states limit or ban non-competes entirely. Consider customer non-solicitation as alternative where non-competes are unenforceable.
6. Review with employment attorney before implementation. Have qualified employment counsel review agreements for state law compliance and enforceability. Update templates annually as employment laws change. Maintain signed copies and document any modifications with written amendments.