Employment Contract Checklist: 50-Point Review
Most people don't review their employment contract carefully. They skim it, see "salary: $100k," and sign. Two years later: "Wait, I lost all my equity because I quit? I can't work for anyone in tech for 2 years?" This 50-point checklist forces you to review everything before you sign.
Compensation Section (10 items)
1. Annual salary stated clearly (number, not "competitive"). 2. Payment frequency (weekly, bi-weekly, monthly). 3. Sign-on bonus amount and timing. 4. Sign-on bonus clawback terms (if any). 5. Annual bonus formula and % of salary. 6. Bonus performance metrics defined. 7. Equity grant: quantity and type (options, RSUs, restricted stock). 8. Vesting schedule: length in years (4 years standard). 9. Vesting cliff: length in months (1 year standard). 10. Strike price (for options) and company valuation provided.
Benefits Section (10 items)
11. Health insurance plan type (HMO, PPO, HDHP). 12. Company premium contribution percentage. 13. When health insurance starts (day 1 or after 90 days). 14. Dental insurance coverage. 15. Vision insurance coverage. 16. 401k match percentage and cap. 17. 401k vesting schedule. 18. PTO days per year. 19. Separate sick leave or included in PTO. 20. PTO rollover policy (carryover allowed or use-it-or-lose-it).
Leave & Time Off (6 items)
21. Parental leave: length and paid/unpaid status. 22. Parental leave: applies to all family types equally. 23. Sick leave: paid, how much. 24. Bereavement leave: paid, how much. 25. Religious holiday observance allowed. 26. Sabbatical: available, how often.
Employment Terms (8 items)
27. Employment status: at-will or term-based. 28. If term-based: length of employment. 29. Probation period: length and terms. 30. Severance: amount if fired without cause. 31. Severance calculation: weeks/months of salary. 32. Benefits continuation during severance. 33. Notice period required (how much notice to quit). 34. Notice requirement is mutual (company also gives you notice).
Restrictive Clauses (12 items)
35. Non-compete: duration (months/years). 36. Non-compete: geography (miles, region, nationwide). 37. Non-compete: scope ("direct competitors" vs. "entire industry"). 38. Non-compete: applies if fired or only if you resign. 39. Non-solicitation: do you understand it. 40. NDA: duration and scope. 41. Confidentiality: what's considered confidential. 42. IP assignment: does company own all work or just company work. 43. IP assignment: does company claim side projects/personal work. 44. Clawback clause: exists or not. 45. Clawback: duration if it exists. 46. Clawback: pro-rata or cliff structure.
Dispute & Legal (5 items)
47. Binding arbitration: mandatory or optional. 48. Arbitration: can you opt out. 49. Non-disparagement: can you speak negatively about company. 50. Non-disparagement: is it mutual (applies to company too). (Bonus) Entire agreement: does contract say this supersedes verbal promises.
Frequently Asked Questions
What if my contract doesn't have some of these items?
Missing items = gaps you should fill. Example: No severance clause = you get $0 if fired. No non-compete clause = you're free to work anywhere. Ask HR to clarify missing items.
How many red flags disqualify an offer?
Depends on the job. One major red flag (e.g., 5-year non-compete) might be disqualifying. Multiple minor red flags (clawback + binding arbitration + vesting cliff >1 year) together might be disqualifying. You decide your threshold.
Can I skip this checklist for a good company?
No. "Good companies" still have non-competes, clawbacks, and unfavorable vesting. Review everything regardless of company reputation.
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