Can this agreement handle hiring across countries?

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.

What if we want to pay more than just a salary?

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.

Does it protect the company if an employee leaves for a competitor?

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.

Can an employee keep side projects or board seats?

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.

Is there real protection for employees too?

Yes. It includes indemnification and liability insurance for employees acting in good faith on behalf of the company, something rarely seen in standard contracts.

What if the employee works in another time zone or hybrid schedule?

The Key Terms lock in the agreed work arrangement whether on-site, remote or hybrid so there is no ambiguity about expectations or obligations.

U.S. Employment Agreement

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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.

Employment Agreement by Skala

Default Employment Agreement

Compensation

Covers salary, bonus, equity with clear structure and vesting

Usually salary only, bonus optional, equity uncommon

Vacation

30 days, with proration for partial years

Generic reference to company policy no fixed number

Dispute Resolution

Choice between litigation and arbitration with institution options

Standard reference to applicable law, no choice of mechanism

Confidentiality

Detailed clause with definitions and limits on use and disclosure

Brief or generic clause, sometimes absent

Termination

At-will employment with automatic renewal and return of property obligations

At will only no renewal or property return terms

Indemnification and Insurance

Company indemnifies employee and provides liability coverage

Rarely included in basic templates

Outside Activities

Permitted with board approval, provided no conflict exists

Not usually addressed

Governing Law

Multiple jurisdictions offered for selection

Fixed jurisdiction with no alternatives

Customization

Modular adaptable to role, location, hours, and benefits

Boilerplate, limited flexibility

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.

It is designed with clear, plain language so you can focus on employee onboarding without having to decode legal jargon.

Skala’s employment agreement template is built to be:

Compliant with common legal standards and market practice
Fair to both parties
Flexible to suit different roles

What’s Inside

Just like Skala’s Independent Contractor Agreement, the Employment Agreement walks you through the critical clauses with built-in tips:

Position

Specify any role, from trainee to CEO

Compensation

Base salary, bonus eligibility, equity grants

Employment Term

Fixed term or ongoing, with renewal options

Location

On-site, remote, or hybrid

Commitment

Full-time or part-time

Vacation

Set annual paid leave days

Governing Law

Choose between New York, California, UK, and Singapore or select your own

Dispute Resolution

Litigation or arbitration options

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.

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FAQ

Does every employee need a formal employment agreement?

Generally, yes. A written employment agreement is strongly recommended because it clearly documents the employee’s position, compensation, benefits, confidentiality obligations, termination terms, and governing law. This helps avoid misunderstandings and makes the agreed terms easier to prove and enforce.

What is "at-will" employment and how does it affect the agreement?

At-will employment means either party can end the relationship at any time, for any lawful reason. Most U.S. states default to at-will. The employment agreement should state this explicitly. If the agreement instead specifies a fixed term or requires "cause" for termination, the employer's ability to let the employee go is significantly more limited and severance obligations may apply.

How should equity compensation be documented in an employment agreement?

The employment agreement can summarize the employee’s equity eligibility or key commercial terms, such as the expected grant size and vesting schedule. The actual equity grant should be documented separately under the company’s equity plan and approved grant agreement. Those documents should cover the detailed terms, including vesting, exercise price, tax treatment, and any conditions on the grant.

What IP ownership clauses should an employment agreement include?

The employment agreement should include strong confidentiality obligations. IP ownership and invention assignment are usually handled in a separate proprietary information and inventions assignment agreement (PIIAA). That agreement should assign to the company work product, inventions, and other IP created by the employee in connection with their role, subject to any exclusions required by applicable law.

Can a startup use the same employment agreement template for all employees?

A single template works well for most roles. Senior executives (C-suite, VP-level) typically negotiate additional terms: severance packages, change-of-control protections, double-trigger acceleration on equity, and broader benefits. Always customize the agreement for those hires. Also confirm that the template's governing law and at-will provisions are appropriate for the state where the employee is actually working — some states restrict or modify at-will employment by statute.