Employment Agreement
About Employment Agreement
An employment agreement (also known as a hiring contract or workplace agreement) defines the terms between employer and employee. It covers employment terms, compensation, confidentiality, and more.
Formalizing employment terms is a routine requirement for growing companies, yet most organizations still rely on ad-hoc documents or outdated templates. We’ve changed it.
Skala’s employment agreement template is built to be:
Fair to both parties
Flexible to suit different roles
Compliant with common legal standards and market practice
It is designed with clear, plain language so you can focus on employee onboarding without having to decode legal jargon.
What’s Inside
Just like Skala’s Independent Contractor Agreement, the Employment Agreement walks you through the critical clauses with built-in tips:
Things to Consider
Employment Term and At-Will
The Employment Agreement by Skala includes both a stated term (e.g., 12 months) and an at-will provision. This means employment can end at any time, with or without cause, or automatically at the end of the stated term unless renewed.
State Law Compliance
Employment laws vary by state. Check requirements on minimum wage, overtime, paid leave, and final paycheck timing in the employee’s work location.
Exempt or Non-Exempt Status
For the U.S.-based employments, correct classification under the Fair Labor Standards Act (FLSA) determines overtime pay obligations.
Equity Terms
If granting stock options or restricted stock, ensure compliance with tax, securities, and company employee stock option plan rules. Include a clear vesting schedule in the equity grant agreement.
Bonus Eligibility
Define performance metrics and payment dates to avoid misunderstandings.
Benefits
Confirm eligibility periods and coverage terms for health, retirement, and other benefits in your employee handbook or plan documents.
Confidentiality & IP Protection
This agreement includes confidentiality obligations but does not cover invention assignment or IP ownership. To make sure all IP (apart from what’s excluded under applicable labor laws, such as California Labor Code § 2870) is assigned to the company, you’ll need a separate IP assignment agreement. Many employers use a Proprietary Information and Inventions Assignment Agreement (PIIAA) for this as it covers prior inventions created for the company before official employment.
Outside Activities
Pre-approved external board or advisory roles must not conflict with company interests; maintain written approvals for records.
Non-Compete and Non-Solicit
Not included in this agreement. If you require them, verify enforceability under state law (e.g., California prohibits most employee non-competes).
Dispute Resolution
If selecting arbitration, confirm compliance with the Federal Arbitration Act and any state-specific rules; ensure the chosen arbitration body’s rules fit your needs. For example, in California the employer is required to cover the arbitration costs, including the arbitrator’s fees, regardless of the case’s outcome.
One document. Countless hires.
FAQ
The exercise price of the shares under the FAST agreement will be determined at the time of issuance and will be included in the applicable Stock Purchase Agreement.
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FAQ
Yes. The governing law and work location are clearly stated, so the same framework can work for local hires or fully remote international talent without confusion over jurisdiction or obligations.
The agreement makes it easy to combine base pay with performance bonuses, equity grants, and other benefits. All the details are collected in one place so there are no surprises later.
Yes. While it does not impose blanket non-compete clauses, it contains strong confidentiality protections and allows you to define restrictions on certain outside activities if necessary.
Yes, as long as they do not interfere with the role or create a conflict of interest. The agreement even pre-approves activities disclosed before signing so there is clarity from the start.
Yes. It includes indemnification and liability insurance for employees acting in good faith on behalf of the company, something rarely seen in standard contracts.
The Key Terms lock in the agreed work arrangement whether on-site, remote or hybrid so there is no ambiguity about expectations or obligations.