A fixed-term (seasonal) employment contract is used when hiring a worker for specific length of time. Unlike at-will contracts, neither party can terminate employment unless directly permitted in the agreement. Other than having a fixed start and end dates, fixed-term employees are afforded many of the same benefits as at-will employees, which can include health insurance, paid time off, and vacation time.
Commonly Used For:
- Seasonal businesses
- Large projects
- Covering absent employees (such as maternity leave)
Much like a standard employment contract, a fixed-term contract lays the groundwork for how an employee and employer will go about working together. Notable provisions from the agreement include:
Like nearly all agreements, the form starts off by establishing the names and addresses of the parties. When completing the form, it’s recommended to use the entity’s name and principal mailing address instead of the name and address of the company’s owner.
Here, the employer will need to clearly convey the day-to-day responsibilities the employee will have in 1-3 sentences. If the employer runs out of room, they can attach an addendum containing any additional language they wish to include. If the employer provides new hires with an employee handbook, they can write-in language similar to “Please reference employee handbook page [#]” to avoid having to outline all of the details when filling in the form. Referencing a handbook instead of manually writing a description provides the employer with a way of updating an employee’s duties without needing to amend and re-sign a new contract.
The benefits allotted to short-term or seasonal employees are often more limited when compared to more standard, at-will workers. Having said, some employers opt to provide health insurance, PTO, vacation time, and other benefits for extended projects. Like the duties and responsibilities mentioned above, the employer can reference an employee handbook in lieu of manually inputting the employee’s benefits into the form.
This essential provision establishes the length of time the employee will work with their employer. Also included is whether or not the employee will be given the option to terminate the contract. If so, the employer will need to write the number (#) of days’ notice that must be provided before terminating (e.g., 2 weeks) and if severance will be provided should the employee or employer end the agreement.
Fixed-term employees are compensated in a similar fashion as to at-will employees, although lump sum payments for an entire project are more common. The employer will need to convey the salary or hourly rate the employee will receive, followed by the situation(s) that constitute receiving a commission and/or bonus (if any).
The agreement includes a provision regarding confidentiality to provide entities with a means of collecting damages should a fixed-term employee steal (and leak) confidential information owned by the employer. What constitutes a “trade secret” is broad, but includes recipes, formulas, patents, inventions, and processes, to name a few. Employers that want greater levels of control over what constitutes as a trade secret can attach a standalone confidentiality agreement to the employment contract, known as a non-disclosure agreement.
To finalize the contract, both the newly hired employee and a representative of the employer (e.g., owner, HR manager, etc.) will need to sign and date the contract. Once signed, a copy should be provided to the employee digitally or in print.