How to Sign a Contract of Employment

An employment contract comes with rights and responsibilities.

By signing an employment contract, you can secure certain rights related to your new job. You'll likely come across terms related to salary, vacation days and other benefits. Employment contracts also impose various legal obligations on you, so review the contract carefully and understand what it says. The specific terms of your contract will vary depending on the company and specific job involved, but you'll need to be familiar with aspects of the negotiation and contract process in advance.

Instructions

1. Negotiate and agree to the most critical terms of the contract before you even consider signing anything. Find out how much you'll be paid, what your job description will be and how long the contract will remain in effect.

2. Read and understand the contract before you sign. Your employer likely has a standard form contract that he'll just ask you to sign. Make sure it correctly reflects the job description, compensation and employment duration. If it doesn't, have the employer correct the contract as necessary.

3. Review any benefits that may not have come up before you saw the contract. Look for bonus compensation, vacation days, sick days and health insurance provisions (including dental and visual). If you want or expect these benefits, they must appear in the contract.

4. Read those provisions of the contract that limit what you can do during and after the contract period. Employment contracts can limit your ability to use confidential company information for your own or others' benefit, during and after your employment. Some contracts even limit your ability to work for the company's competitors for years after you've left the company.

5. Familiarize yourself with what the contract calls for in the event that the employment relationship turns bad. Many employment agreements contain language providing for arbitration to settle disputes, rather than more costly and time-consuming litigation. Most employment agreements also allow the employer to terminate the employee for certain reasons before the end of the contract period. Typically, an employer may terminate an employment contract if the employee commits a fraud or fails to fulfill his duties adequately. Understand these grounds for termination and keep them in mind once you begin work.

6. Sign the contract and make sure an authorized officer of the company does, too. Just as you're agreeing to be bound by the contract, you should ensure that the company will be fully bound as well. For your own protection, ask for a copy of the signed contract.

Tips & Warnings

• Hire a lawyer to help you understand the employment agreement before you sign. For more complex agreements, an experienced attorney can help identify problems and help negotiate better terms for you, especially if part of your compensation will be in stock or stock options.

• The written contract will control your employment arrangement. If the hiring manager promises you something, make sure it's included in the contract; otherwise, you won't be able to hold the company to the promise.

References

• U.S. Department of Labor: Employment Law Guide

Resources

• New Jersey Library Association: Employment Contracts from A to Z in New Jersey
• Reuters: Ten Things to Think About Employment Contract Provisions