An employment agreement is a document which delineates the terms of the relationship between an employer and employee. If you are hiring a new employee, this document can help form a solid foundation for your business relationship. The document will specify expectations for both parties and may include items such as terms of conduct, employee benefits, vacation time, medical leave, hours, and other issues that may be up for consideration, depending on the business' needs.
An employment agreement might also incorporate arbitration conditions, confidentiality terms and non-compete clauses, provided that separate documents do not address these issues. Some employers may include a progressive disciplinary policy section in the agreement, wherein conditions and repercussions for employee misconduct are explained.
Once signed, an employment agreement is a legally binding contract that can be enforced in a court of law. Often an employer or company makes their offer of employment contingent on an employee signing the agreement.