It’s often said, “A man’s word is his bond,” which is another way of saying that if a person is honest and has integrity, their promise is as good as a legally binding contract. The court of law is likely to disagree.
That’s why it’s crucial to have a comprehensive, well-written employment contract signed by both the employer and employee. It is legally binding and it protects everyone involved.
The key elements of the employment contract
Contracts should be tailored to the individual business, but some components need to be in every contract:
- Job responsibilities: Clarifies the tasks the employee is hired to perform and prevents employers from assigning tasks outside the agreed scope or making arbitrary changes to the job.
- Compensation and benefits: Guarantees the employee receives the agreed-upon salary and benefits, and helps prevent disputes over pay or other perks.
- Confidentiality: Sensitive company information, such as trade secrets or client data, is protected from being shared with competitors. The employees are protected from inadvertently sharing confidential information.
- Alternative dispute resolution methods: Employees have a clear pathway for resolving disputes without fear of retaliation. Employers don’t have to worry about long, expensive court battles.
In addition to the employment agreement, New York State has its own employment laws that companies and employees need to keep in mind. The state is an at-will employment state, which means that either the company or employee can terminate the employment at any time, for any lawful reason. However, an employment contract can supersede at-will employment. For example, an agreement can specify reasons for termination, require the employee to give a two-week resignation notice or state that the employer will provide severance pay.
An employment contract cannot state that the employee will work at a wage below the state minimum wage of $15.50 per hour.
To prevent the risk of non-compliance, companies should have their employment contracts reviewed by a legal professional to ensure that the contract is well-drafted and comprehensive.
