An Employee Compensation Agreement is a formal, written document that outlines the wages and other benefits an employee is entitled to in exchange for their services. It details the amount of money the employee will be paid, when they will receive payments, and any non-monetary compensation, such as health and retirement benefits. While this agreement does not necessarily have to be in writing, it is strongly encouraged as it serves as a record of agreement between both parties and protects all involved. A well-drafted Employee Compensation Agreement should clearly articulate the terms and expectations of both employer and employee while providing each party with the peace of mind that they are both aware of their rights and obligations.