How to create an Employee Bond Agreement
Easy to Use Legal Templates
Quickly and easily create any legal agreement for you or your team.
Affordable Plans
Straightforward pricing plans and bespoke packages built to simplify all your legal demands.
Vast Document Library
Zegal’s comprehensive collection of agreements means you always have what you need at your fingertips.
What is an Employment Bond Agreement?
An employment bond agreement is a legal contract establishing a fidelity bond between two parties; typically a company and its employee. Essentially, the terms of employment are set out, subsequently creating a form of insurance for the company against the possibility of its employee potentially part-taking in dishonest or fraudulent acts.
Different types of Employment Bond Agreements
Employment Bond Agreements are signed for a number of various purposes. Most commonly, it is used in order to outline restrictions on employees for joining a company. However, it may also be used to set restrictions on what the employee can do after their term of employment with the company ends. Finally, the agreement may also stipulate monetary penalties applicable to the employee should they leave before the term of their contract is complete.
Who needs an Employment Bond Agreement?
This fidelity bond acts as a form of insurance, protecting the company against any type of losses it may suffer as a result of an employee’s dishonest or fraudulent behaviour. This may be particularly useful for companies who provide potentially high risk information or valuable company assets and finances to their employees. This agreement may also include a non-compete clause to prevent the employee from engaging in direct competition after they leave the company.
When enforcing employment bond agreements, it is important to note the three key players that govern this relationship between the company and its employee. Firstly, the principal is the individual who purchases the bond agreement and risks violating its terms. The party being protected from such violations of contract is called the obligee and the surety is the company issuing the bond. The surety is also the party responsible for paying the initial value of the claim being violated. Ultimately, however, the surety would be able to pursue a claim agains the employee for the sum of money to replace training and other relevant expenses.
What to include in an Employee Bond Agreement
While the contents of an employee bond agreement vary greatly between companies depending on its purpose, most agreements will include the time period for which an employee is bound by the agreement, the date on which remuneration is issued to employees, allowances for other amenities such as technology and transport, the company’s attendance policy and so on.
It is also important to note that the time period for which an employee has to remain with the employer should be reasonably dictated by the company. The employer cannot stipulate within a contract an unreasonable length of employment period and this would differ from one company to another.
Conclusion
Essentially, an employment bond agreement creates a fidelity bond between the employer and employee. It acts as insurance or protection for the employer against potentially fraudulent behaviour during and even after the employee’s contract with the company has concluded.
You Might Also Like
Along with this document, make sure you see these other templates in our library:
- Employment Contract
- Statement of Terms of Employment
- Employee Privacy Notice
- Employee Share Option Plan
The Zegal Template Library
Zegal's template library is a list of essential and premium business templates for your everyday legal needs.
Save money and time without sacrificing quality or missing vital legal requirements. Whether you're a startup or a larger enterprise, Zegal lets anyone create a legal agreement.
Let us take care of the legals so you can focus on running your business.
If you need more help, our "Talk to a Lawyer" feature gives you access to a qualified lawyer to get all the expert advice you need.
Try it for free today!
Related Documents
If you're creating an Employee Bond Agreement, you may also be interested in the following documents:
Nice things people say about Zegal.
"Using Zegal allows us to take a lean and efficient approach that cuts costs while maximising results."

Alex So
Managing Partner

"Zegal is easy to use and customer service is responsive and helpful! I strongly recommend it!!"

Alan NG
CEO

"Zegal makes onboarding a new client or employee fast and simple."

Veronika Kuznetsova
Managing Director

“Zegal really works well for all our legal documentation needs, and it is also user-friendly and mobile at the same time.”

Daniel W. Ho
Managing Director & Principal Consultant

“Zegal is like my teammate, helps me draft the right template, quickly gets my work done, and also saves me money on legal needs.”

Alan Schmoll
CEO & Co-Founder

“With colleagues, partners, and clients across the globe, Zegal provides an easy-to-use tool that streamlines processes that saves costs and time.”

Tony Wines
CEO of Turnkey

“Zegal has been such a great help in my business operations.”

Amanda A Atan
Managing Director at VIBES Mastery

“With Zegal, we work smarter rather than harder. Being a business professional, a proper document management system is always a must.”

Edgar Kautzner
Managing Consultant

“Zegal, a platform for compact package of legal templates, secured e-signing, reasonable cost and high level customer service.”

Paul Falzon
Director

“Zegal is easy to use, affordable and the platform is simple to navigate which makes the process of putting together a document fast and fuss-free.”

Jonathan Wong
Founder & Managing Director

“Love the new flow/design, very quick and easy to use now. I have done 2 or 3 customer contracts in a flash over the past 2 days.”

Chris Head
General Manager and Managing Editor

“Consistently positive experiences with Zegal’s technology, and customer services teams, who ensure that our issues or questions are responded to immediately.”

Tony Wines
CEO of Turnkey
