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What is an Employment Contract and Do I Need One?

April 2, 2021

Employees and employers are always trying to find ways to improve their relationships and make working together easier and less stressful. Employers want to ensure that their employees are trustworthy and will provide excellent results, while employees want good employers they can trust to treat them fairly. While many jobs do not include a contract, there are some instances in which a contract is appropriate.

What is an Employment Contract?

An employment contract is a legal document between an employer and employee. It stipulates various requirements, duties, and responsibilities for both parties who enter into the agreement. Wisconsin is an employment at-will state. This means that both parties can terminate employment at any time without any reason. While this arrangement can be good in some cases, it may be problematic, especially for employees and employers who wish to maintain a more stable work relationship. A contract is a legal agreement between employers and employees as to the rules of employment, termination, compensation, and more.

Benefits of an Employment Contract

There are some benefits of an employment contract. First and foremost, the contract provides some protection from termination. Typically, a contract outlines the basic guidelines for termination including how an employer can take action against an employee and how either party can end the contract. An employment contract protects employees from getting fired at will and it gives employers confidence to provide training and other benefits to employees who will remain on the payroll. Both employers and employees should have peace of mind that they can count on their employment for a period of time.

What Should an Employment Contract Include?

An employment contract should be as specific as possible so that both parties understand the terms of the agreement. A basic employment contract should at the least include the terms of employment, pay, and benefits. It should provide details about the role and responsibilities of the employee and employer. It should include details of time off such as vacation, holidays, and leave. The employer may want to include protections of trade secrets with a confidentiality clause. The contract should provide details for how to resolve employment disputes. The contract should be designed to protect both parties and give them each security for employment. The contract must comply with Wisconsin Fair Employment laws. An employment contract should be in writing and must be signed by both parties.

Drafting and Approving Employment Contracts

While there are contract templates available, it is usually best to draft an employment contract that specifically addresses the unique issues of your particular business. An employment law attorney will provide you with a contract that meets your needs and provides protection in a clear and concise manner. As an employee, if you are presented with an employment contract you should review it thoroughly before you sign the document. An attorney will explain the details to you and give you advice for making any changes when necessary. An employment contract can be valuable to both parties, but only when the document is fair to everyone.

To learn more about employment contracts and to seek legal assistance, contact Moen Sheehan Meyer, Ltd. online or by phone at (608) 784-8310.

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