You’ve found the perfect candidate. Clearly it’s not another Bob, since you’ve learned your lesson. The interviews went smoothly, they checked all the boxes, and now it’s time to seal the deal. Clearly it’s not Bob, or you’d probably run away screaming. But before you shake hands and welcome them aboard, there’s one crucial step—getting that employment contract right.

Employment contracts aren’t just paperwork; they’re your legal safety net. Done right, they protect your business, set clear expectations, and ensure compliance with Canadian employment laws. Done wrong—or worse, skipped altogether—you could be facing costly disputes down the road. And who has time or money for that?

So, what should your employment contracts include? Let’s break it down.

1. The Basics: Who, What, Where, and When

Start with the essentials:

• Employee’s full name and job title
• Start date and work location
• Whether the role is full-time, part-time, temporary, or permanent

Think of this as setting the stage. The clearer you are upfront, the fewer misunderstandings down the line.

2. Compensation & Benefits (Show Them the Money!)

Salary, bonuses, commissions—spell it all out. Transparency here prevents future confusion. Be specific about:

• Base salary and frequency of pay (weekly, biweekly, monthly)
• Commission structures, if applicable
• Overtime policies (and how they comply with provincial laws)
• Any benefits, like health insurance, pension plans, or RRSP matching

If you’re offering perks, make sure employees know exactly what they’re getting.

Rascal tip:  Some specifics, such as details of the benefits plans or RRSP matching, change from time to time.  Mention them in your contract, but include the details in a separate document so they can be changed without creating a new contract.  

3. Work Hours & Expectations (No Surprises, Please)

Not everyone works the typical 9-to-5. Be clear about:

• Regular working hours and any expectations around overtime
• Flexible work arrangements or remote work policies
• Performance evaluation timelines and criteria. You can refer to your policy manual for more detailed information.

We all know of a Bob that arrives late and leaves early, or “works from home”.  You need clarity of these expectations to put Bob on the right path!

4. Termination & Notice Periods (Because Breakups Happen)

Nobody likes to think about termination when hiring, but it’s crucial. Outline:

• How much notice either party must give (following provincial rules)
• The difference between termination with cause and without cause

This section ensures that if things don’t work out, both sides know their rights and responsibilities.  This is especially important if (when) you hire your own Bob.  You’ll want to be able to terminate him and protect yourself. 

5. Non-Disclosure and Intellectual Property Rights Agreements (Protect Your Business)

Your employees will have access to sensitive business information. Make sure you have clauses covering:

• Confidentiality: Employees shouldn’t disclose trade secrets or sensitive data
• Non-solicitation: Ensuring employees don’t poach clients or colleagues if they leave
• Intellectual Property Rights: Employees must understand that any work they create while employed belongs to the business, not to them.

Protecting your business is very important, we want to make sure these are right.  The last thing we want is Bob stealing company secrets.  Poaching your other Bob’s when he leaves .. that may be a different story. 

Legal enforceability varies across Canada, so make sure your agreements align with provincial laws.

6. Compliance with Provincial Laws (Because One Size Doesn’t Fit All)

A contract that works in Ontario might not be valid in British Columbia. Each province has its own employment standards, covering:

• Minimum wage
• Vacation entitlements
• Statutory holidays
• Overtime pay

Your contracts must align with the specific province where your employee is working—especially if you operate in multiple regions.  This is so often missed by the “template contracts” you find on the Internet.  

7. Regular Updates & Reviews (Set It and Forget It? Nope.)

Employment laws change, and so should your contracts. Review them regularly to ensure compliance with:

• New legislation
• Changing workplace policies
• Updates in benefits or compensation structures

If your contracts are gathering dust, it’s time for a refresh.

Key Takeaway

A well-drafted employment contract isn’t just a formality—it’s a shield for your business and a guide for your employees. By clearly outlining terms, expectations, and legal obligations, you create a solid foundation for long-term success.

Need help creating legally compliant employment contracts that work in your province? RascalHR makes it easy. Get in contact with us today to get started.