The standard four-type answer is permanent, fixed-term, full-time and part-time employment contracts. These labels describe different parts of an employment relationship, so they can overlap. An employee can have a full-time, fixed-term contract or a part-time, permanent contract.
Terminology varies by country and state.
Employment Contracts at a Glance
| Contract type | Main feature | Common example |
|---|---|---|
| Permanent or open-ended | No planned end date | A long-term staff position |
| Fixed-term or temporary | Ends on a stated date or after a project or event | A six-month parental-leave cover role |
| Full-time | Uses the employer's standard full-time schedule | A 40-hour-per-week employee |
| Part-time | Uses fewer hours than the employer's full-time schedule | An employee working 20 hours per week |
1. Permanent or Open-Ended Employment Contracts
A permanent employment contract, also called an open-ended or indefinite-term contract, has no planned end date.
The relationship usually continues until the employee resigns, the employer terminates the employment, the position is eliminated or another lawful ending event occurs.
A permanent contract may be:
- Full-time or part-time
- Written or, depending on local law, partly oral or implied
- At-will in many US states
- Subject to a notice period or termination protections in other countries
"Permanent" does not mean guaranteed employment. In the United States, most employees are presumed to work under at-will employment. Either party can generally end the relationship at any time for a lawful reason unless an agreement or applicable law provides otherwise.
2. Fixed-Term or Temporary Employment Contracts
A fixed-term employment contract lasts for a defined period or ends when a specified project, task or event is completed.
Examples include:
- A three-month seasonal position
- A one-year graduate placement
- Cover for an employee on parental leave
- A construction or consulting project
- A short-term increase in staffing demand
The contract should state its duration, renewal terms, pay, duties and the circumstances in which either party can end it early. Local laws may restrict repeated renewals or require employers to give fixed-term employees the same treatment as comparable permanent employees.
"Temporary" and "fixed-term" are often used interchangeably. However, temporary work can also describe an employee supplied through a staffing agency.
3. Full-Time Employment Contracts
A full-time employment contract requires an employee to work the employer's standard full-time schedule.
There is no single full-time schedule that applies everywhere. The number of hours depends on the employer, industry and applicable law. Full-time status may affect eligibility for:
- Health insurance
- Retirement plans
- Paid leave
- Bonuses
- Overtime rules
- Other employee benefits
A full-time contract can be permanent or fixed-term. For example, a company might hire someone to work full-time on a nine-month project.
4. Part-Time Employment Contracts
A part-time employment contract requires fewer working hours than the employer's normal full-time schedule.
Part-time employees may work:
- Set days each week
- Reduced daily hours
- Weekend or evening shifts
- A variable schedule stated in the contract
Part-time work can be permanent or fixed-term. Benefit eligibility, paid leave and overtime rules may depend on the employer's policy and local employment law.
The difference between full-time and part-time work concerns the number of hours. It does not, by itself, determine the employee's level of legal protection.
Are Written, Oral, Implied and At-Will Arrangements Different Types?
They can be, but this classification describes a different part of the employment relationship. Written, oral and implied arrangements describe how the terms are created, while at-will employment describes how the relationship may end.
Some US sources use these four categories:
- Written contracts: The terms are recorded in a signed document.
- Oral contracts: The parties agree to employment terms verbally.
- Implied contracts: The parties' conduct, policies or statements create contractual obligations.
- At-will employment: Either party can generally end the relationship at any time for a lawful reason.
This is separate from the permanent, fixed-term, full-time and part-time classification. One employee can fit several categories at once, such as a full-time employee with a written, permanent, at-will contract.
Is an Independent Contractor an Employment Contract Type?
Usually, an independent contractor agreement is not an employment contract type. It is generally a service arrangement rather than an agreement between an employer and an employee.
The Internal Revenue Service assesses worker classification using factors involving:
- Behavioral control
- Financial control
- The relationship between the parties
Calling someone an "independent contractor" in a written agreement does not determine their legal status by itself. The actual working relationship matters.
The contract label is only the starting point. The applicable law, the wording of the agreement and the way the work operates in practice determine how the relationship is treated.