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Free employment agreement template (Word)

Reviewed by Clausery editors · · 3 min read

A contract between an employer and employee setting out the terms of employment — role, compensation, benefits, work hours, intellectual property, confidentiality and how employment can end.

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An employment agreement (or employment contract) is signed when a new hire starts work. It sets out the key terms of the job — title, pay, hours, benefits, leave, confidentiality, IP assignment, non-compete/non-solicit and termination — so both sides know where they stand.

At-will employment is the default in most US states, but a written agreement is still useful for IP assignment, confidentiality, bonus/commission terms, and any restrictive covenants. Have an attorney review restrictive covenants as enforceability varies widely by state.

What to include#

  • Parties and role. Employer name and address; employee name and address; job title; department; start date; reports-to; work location (and remote-work terms).
  • Compensation. Base salary or hourly rate, pay frequency, overtime eligibility, bonus/commission structure, equity if any, paydays.
  • Benefits and leave. Health insurance, retirement plan, PTO/sick leave, holidays, parental leave, and other benefits (and when eligibility starts).
  • Duties and expectations. Core responsibilities, work hours, at-will or fixed-term status, performance review schedule, and any probation period.
  • Legal clauses. Intellectual property assignment, confidentiality, non-compete/non-solicit (as enforceable), return of property, dispute resolution (arbitration/mediation), and termination terms.

How to fill it in#

  1. Step 1: Finalise the offer first

    Agree on salary, title, start date and key terms verbally or in an offer letter before drafting the agreement.

  2. Step 2: Use compliant language

    Make sure restrictive covenants meet your state rules (non-competes are banned or unenforceable for many workers post-2024).

  3. Step 3: Spell out compensation clearly

    State base pay, bonus formula (discretionary vs formulaic), commission triggers and paydays explicitly.

  4. Step 4: Include IP and confidentiality

    Assign work product to the company and require confidentiality of company information; include a return-of-property clause.

  5. Step 5: Sign before day one

    Both parties sign before or on the start date; employee gets a fully signed copy. File with HR records.

Job offer letter

Shorter offer letter that often precedes the employment agreement.

Employee NDA

Confidentiality standalone if not inside the employment agreement.

Employment verification letter

Proof-of-employment letter for lenders and landlords.

Non-compete agreement

Standalone restrictive covenant (check enforceability).

Free HR letter templates

Full HR letter/contract template set.

Questions

Is an employment agreement required?

No in the US (at-will is the default) but strongly recommended for IP assignment, confidentiality and clear terms.

Can I change it after signing?

Only with the employee written consent; material changes without consent can be unenforceable.

Are non-competes enforceable?

They are banned for most workers under the 2024 FTC rule (currently under litigation) and heavily restricted in many states; consult counsel.

Do I need one for every employee?

It is best practice for exempt/professional roles and any role with IP access; offer letters can suffice for hourly staff if you cover IP/confidentiality.

At-will vs fixed-term?

At-will means either side can end it any time for a lawful reason; fixed-term sets an end date and usually requires cause or notice to terminate early.

Browse all templates →

These are general templates, not legal or tax advice. Have anything unusual reviewed for your jurisdiction.

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