employment contract

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employment contract

see CONTRACT OF EMPLOYMENT.

employment contract

a CONTRACT between an EMPLOYEE and the company for which he or she works, specifying the terms and conditions governing his or her employment. Employment contracts of directors and senior executives are called service contracts, and these often contain provision for generous severance payments in the event of early dismissal.

The employment or labour contract between an employee and the firm that employs him or her generally specifies that the employee undertakes specific tasks for the firm in return for a WAGE. While the wage paid to an employee is a clearly definable part of the labour contract, the level of skill exercised by an employee and the amount of effort he or she exerts in working is more difficult to specify and measure. Consequently, labour contracts are subject to possible contract problems, such as ADVERSE SELECTION and MORAL HAZARD, and may involve significant AGENCY COSTS.

See LABOUR MARKET.

References in periodicals archive ?
Since the tool was refreshed 127,671 people have visited the site to create employment agreements and learn about their rights and responsibilities, with the tool receiving a 95 per cent positive feedback rating.
As part of the exchange, each taxpayer and the S corporation entered into a restricted stock agreement (RSA) and an employment agreement providing that each taxpayer would receive less than the full fair market value (FMV) of his S corporation stock if he were terminated "for cause" before Dec.
83-3(c) (2) could be different from its meaning in the RSAs and employment agreements between the taxpayers and UMLIC S Corp.
BankUnited Inc (NYSE:BKU), a bank holding company, has signed a new three-year employment agreement with its chairman, president and CEO John Kanas, the company stated on Wednesday.
Save the signed employment agreements in a safe place where they can be easily found.
An employee is generally presumed to have read and understood the terms of an employment agreement that he or she has signed, and therefore voluntarily consented to its provisions.
6) A typical employment agreement will prohibit employees from disclosing nonpublic information about the employer.
Although Conrad opted not to stay on at Votenet Solutions, the company honored the employment agreement for Ellison, who is currently director of marketing.
The new law has particular significance for large, multi-state corporations, which typically have choice-of-law and venue provisions in employment agreements specifying, for example, the company's state of incorporation or principle place of business, in order to ensure predictability.

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