Types Of Employment Contracts: What You Need To Know (2026)

What Is an Employment Contract?

Employment contracts are a key part of employment law. These contracts outline the terms of the relationship between employer and employee, and they are legally binding.

Types of Employment Contracts

There are many types of employment contracts, but these are seven of the most common:

• Full-time
• Part-time
• Freelance/independent contractor
• Temporary/fixed-term
• Casual employment
• Open-ended employment
• At-will

Here’s a closer look at how each one works:

Full-Time Contract

These contracts are usually offered to employees who work 35-40 hours per week. Most full-time employment contracts include insurance and other benefits.

Part-Time Contract

Part-time contracts are for employees working less than a full workweek. These contracts offer flexibility, but they usually don’t come with benefits.

Freelance/Independent Contractor Contract

If a business works with someone who is self-employed, they may create a freelance contract. Many of these contracts are project-based.

Temporary/Fixed-Term Contract

These limited-term contracts are typically project-based as well. However, unlike freelance contracts, they are given to employees of a business.

Casual Employment Contract

Casual employment contracts (sometimes called “zero-hour” contracts) are for those who work with a business on an as-needed basis.

Open-Ended Employment Contract

With open-ended employment contracts, there is no set end date, but the employer or employee may terminate the relationship if desired.

At-Will Contract

Most states (with the exception of Montana) are at-will employment states. This means either party may end the relationship for any legal reason.

How Are Employment Contracts Delivered?

There are a few ways that different types of employment contracts may be delivered:

• Written contracts outline all employment terms and are signed by both parties.
• Verbal contracts are discussed but not put in writing.
• Implied contracts are created by an employer’s behavior but are not explicitly stated.

Verbal and implied contracts can be hard to prove in court. As a result, it’s often better to offer written contracts.

Essential Elements Every Employment Contract Should Include

A contract should clearly outline the relationship between employee and employer. It should at least include the following:

• Job title and duties
• Compensation
• Benefits (if applicable)
• Start date and schedule
• Termination or resignation terms
• Confidentiality provisions
• Dispute resolution procedures

To avoid legal issues, employers should always work with an attorney to draft employment contracts.

How to Choose the Right Employment Contract

The right employment contract depends on your sector, your individual business and the role you’re hiring for. The best way to decide is to discuss your situation with an employment lawyer.

If you want to know more, ConsumerShield can help! We’re here to offer employers and employees the legal knowledge they need. Whether you have questions about employment law, consumer law or something else, take a look at our resources and forms!