Can this agreement be signed electronically?

Yes. Electronic signatures are generally valid under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted; confirm the transaction is not an exception such as a will or certain court filings.

Is a notary required for enforceability?

Most states do not require notarization for employment agreements, but specific clauses or state rules may. Use a notarized or RON session where a witness or proof of identity is desired.

How should I handle tax reporting for severance?

Treat severance as taxable wages for withholding and reporting; issue appropriate W-2 or 1099 forms by statutory deadlines (see IRS guidance) and consult payroll for timing and withholding.

What if an employee refuses to sign the release?

Without a signed release, the employer may lose the intended liability protection; consider negotiating terms, offering alternate consideration, or consulting counsel about next steps.

How long must I retain the executed agreement?

Retain employment and tax-related documents per IRS and applicable law—generally a minimum of 3 years for tax records (IRC §6501(a)); many organizations keep agreements longer for defense purposes.

Can I require a noncompete in the agreement?

You can include noncompetition clauses where enforceable, but enforceability varies by state; tailor scope, duration, and geography to be reasonable and defensible under local law.

Electronic Signature
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Employee Matters Agreement

Employee Matters Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

What the Employee Matters Agreement covers

An Employee Matters Agreement is a written contract between an employer and one or more employees that documents the rights, obligations, and post-employment arrangements tied to a separation, transaction, or operational change. Typical topics include severance pay, benefits continuation, treatment of equity awards, release of claims, confidentiality and noncompetition provisions, transition assistance, and record retention. The agreement clarifies timing, payment schedules, tax treatment, and dispute resolution so parties understand obligations and employers limit exposure during workforce changes or corporate transactions.

Why an Employee Matters Agreement matters to employers and employees

The agreement creates predictable outcomes for both sides: it defines compensation and benefits on separation, preserves confidential information, allocates legal risk, and documents releases that reduce future litigation. Clear, written terms improve compliance with tax, employment and benefits rules while supporting consistent HR and payroll processing.

Who typically prepares and reviews this agreement

Collaboration among HR, payroll, and legal before execution reduces the chance of post-signature disputes and processing errors.

Human resources leaders and HR operations teams who ensure payroll and benefits continuity and verify COBRA/retirement handling.
In-house or outside employment counsel who draft release language, review restrictive covenants, and assess state law enforceability.
Transaction and integration teams in mergers or restructurings who coordinate offer terms, retention payments, and equity vesting adjustments.

Who can sign on behalf of each party

HR Director

The HR Director or delegated HR manager signs for administrative acceptance and confirms payroll instructions. Their authority typically covers benefit continuation, severance mechanics, and operational notices; legal counsel should countersign where release or restrictive covenant language is involved.

General Counsel

The company General Counsel or authorized corporate officer signs for legal approval, confirming the agreement’s release language, choice of law, and dispute resolution provisions. This signature binds the employer and signals legal review of enforceability and statutory compliance.

Core provisions to include in a professional agreement

A complete Employee Matters Agreement addresses compensation, benefits, claims releases, confidentiality, equity treatment, and transition services. Each provision should be precise about timing, amounts, and conditions that trigger payment or forfeiture.

Severance

State the exact severance amount, payment schedule, payroll method, and whether payment is contingent on a signed release; include tax withholding instructions and gross/net treatment.

Benefits Continuation

Describe continuation of health and welfare benefits, COBRA administration responsibilities, employer contribution amounts and end dates, and how premiums will be handled.

Equity Treatment

Specify treatment of stock options, RSUs, and other awards: vesting acceleration, exercise windows, forfeiture events, and any actions required by the employee to retain rights.

Confidentiality

Include ongoing confidentiality obligations, permitted disclosures, and the duration of nondisclosure duties; clarify return of company property and data deletion requirements.

Claims Release

Use clear release language identifying claims being waived, any carve-outs (e.g., vested benefits, unemployment), and the effective date; ensure compliance with release timing rules.

Transition Assistance

Define expected transition work, part-time consulting arrangements, notice periods, and compensation or reimbursement for business expenses related to knowledge transfer.

Step-by-step: completing and executing the agreement

Follow these steps to prepare, approve, sign, and distribute an Employee Matters Agreement with minimal delays.

01

Prepare template: Use a company-approved template with prepopulated legal clauses.
02

Identify parties: Confirm employee name, ID, and authorized employer signatory.
03

Enter terms: Complete severance, benefits, equity, and release fields.
04

Execute and record: Obtain signatures, save executed PDF, and notify payroll and benefits.

How to amend or update an existing agreement

Use a controlled amendment process to preserve original terms and maintain an audit trail of changes and approvals.

01

Draft:

Create an amendment describing modifications in plain language.

02

Review:

Have legal and HR review for compliance and tax impact.

03

Authorize:

Obtain internal sign-off from delegated approvers.

04

Sign:

Secure signatures from all parties using eSignature.

05

Archive:

Store the amendment with the original agreement.

06

Monitor:

Track any follow-on obligations and payment schedule.

Typical digital workflow settings for online completion

Configure your signing workflow to match internal approval order and retention policies before sending the document for signature.

Field	Configuration
Document Template	Use a locked template with required fields and prefilled company data.
Signer Order	Set employee first, then employer authorized signer in sequential order.
Authentication	Require email plus SMS code or SSO for higher assurance.
Conditional Fields	Show severance details only if termination reason equals 'involuntary'.
Retention Policy	Configure automatic archiving and encrypted storage for seven years.

Digital signing and technical requirements

Ensure the chosen solution provides audit trails, secure storage (AES-256), and any regulatory addenda like a BAA for HIPAA-covered workflows.

Integrations: CRM/ERP links such as Salesforce, NetSuite, and HRIS systems.
File Types: PDF, DOCX, HTML and Excel form support for templates.
Auth Options: Support for email, SMS code, SSO and KBA where required.

Where to send the signed agreement and who receives copies

A clear distribution plan ensures payroll, benefits, and legal teams can act on the terms without delay.

HR Records: Final executed copy stored in employee file for personnel records.
Payroll: Payroll receives payment schedule and withholding instructions.
Legal: Legal retains the original for compliance and dispute defense.
Employee Copy: Provide a signed PDF to the employee immediately after completion.

Key timing and filing deadlines to track

Observe these deadlines to meet tax reporting, employment law, and recordkeeping obligations related to separation payments.

Severance payment timing:

Pay according to the agreement; timing affects tax withholding and benefits.

W-2 / 1099 issuance:

Provide W-2 or 1099 to recipients by Jan 31 each year.

I-9 retention rule:

Retain I-9 for 3 years after hire or 1 year after termination, whichever is later (8 CFR §274a.2).

Backup withholding:

Apply backup withholding at 24% if a valid TIN is missing.

Tax reporting window:

Report compensation and withholdings on the employer’s next required tax filings.

Typical processing milestones from draft to retention

Track these stages so approvals, payments, and records are completed in sequence and with an audit trail.

01

Draft and populate

Prepare the agreement and complete required fields with HR data.

02

Legal review

In-house or outside counsel reviews release and restrictive covenant language.

03

Execution

Parties sign electronically with authentication and time-stamped audit trail.

04

Archive and notify

Distribute copies to payroll, benefits, legal, then archive securely.

Typical eSignature vendor comparison for Employee Matters Agreements

Compare core pricing and capability differences across common eSignature vendors. signNow is listed first per the vendor ordering requirement.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by vendor	Varies by vendor	Varies by vendor	Varies by vendor
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	Varies by plan	Varies by plan	Varies by plan

Security and compliance checkpoints to verify

In Transit: TLS 1.2/1.3 encryption

At Rest: AES-256 encrypted storage

Audit Trail: Timestamped event logs

HIPAA BAA: BAA available when required

ESIGN / UETA: Meets ESIGN and UETA standards

Access Controls: Role-based permissions and SSO

Potential penalties and legal risks to avoid

Unenforceable Covenant: Overbroad restrictions risk judicial invalidation

Tax Withholding: Incorrect withholding can create IRS exposure

I-9 Paperwork: Civil fines $281–$2,789 per violation (8 CFR §274a.2)

Confidentiality Breach: Unauthorized disclosures may trigger regulatory fines

WARN Act Exposure: Mass termination notices may be required

Incorrect Drafting: Ambiguity can lead to costly litigation

Common mistakes when preparing these agreements

Using vague payment terms that omit gross/net treatment or schedule, causing payroll errors and disputes.
Failing to describe equity consequences clearly — missing exercise windows or acceleration conditions leads to forfeiture disputes.
Skipping required consumer disclosures or consent when electronic records are used in consumer-facing contexts, risking ESIGN-related challenges.
Not aligning release language with applicable state law and statutory exceptions, increasing the chance of partial unenforceability.

Real-world usage examples from enterprise customers

Organizations use digital signing to streamline separations, retention payments, and M&A-related employment arrangements.

Optica Ventures LLC

The interface is simple and easy-to-use for internal teams and customers.

Rapid execution reduced turnaround time for separation agreements.
As COO Brian Fitzgibbons noted, ease of use for both staff and recipients helped complete employee matters consistently and with fewer follow-ups.

Xerox

Integration with back-end systems was essential for equity and payroll actions.

NetSuite connection automated record updates after signature.
Kodi-Marie Evans, Director of NetSuite Operations, highlighted flexibility to get signatures on the right documents in the right formats while syncing systems.

Frequently asked questions about Employee Matters Agreements

Answers to common questions on validity, electronic signatures, and recordkeeping to help avoid execution and compliance issues.

Need help? Contact support

Can this agreement be signed electronically?
Yes. Electronic signatures are generally valid under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted; confirm the transaction is not an exception such as a will or certain court filings.
Is a notary required for enforceability?
Most states do not require notarization for employment agreements, but specific clauses or state rules may. Use a notarized or RON session where a witness or proof of identity is desired.
How should I handle tax reporting for severance?
Treat severance as taxable wages for withholding and reporting; issue appropriate W-2 or 1099 forms by statutory deadlines (see IRS guidance) and consult payroll for timing and withholding.
What if an employee refuses to sign the release?
Without a signed release, the employer may lose the intended liability protection; consider negotiating terms, offering alternate consideration, or consulting counsel about next steps.
How long must I retain the executed agreement?
Retain employment and tax-related documents per IRS and applicable law—generally a minimum of 3 years for tax records (IRC §6501(a)); many organizations keep agreements longer for defense purposes.
Can I require a noncompete in the agreement?
You can include noncompetition clauses where enforceable, but enforceability varies by state; tailor scope, duration, and geography to be reasonable and defensible under local law.

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