What should I consider adding to an employment contract?

Many businesses in the New York City neighborhoods and surrounding communities may want to have an employment contract with at least some of their workers.

Employment contracts are standard in many industries, and some desirable applicants may even expect them before agreeing to work for a company. In other cases, having the terms of employment spelled out in a contract is mutually beneficial.

At the most basic level, an employment contract should describe the employee’s job duties and clearly set out compensation and benefits.

It also should spell for what reasons an employer can terminate or decline to renew a contract and how the employer may go about doing so.

On a related point, it may be helpful for an employer to include in the contract a period in which a new employee works on a trial basis, during which an employer is free to let the employee go more easily.

An employer can add provisions to a contract that protect the business

Employers also can take the opportunity to add provisions to the contract that can protect their interests.

For example, if an employer wants to prevent an employee from leaving work and setting up a competing business, the employer may include a non-compete agreement as part of the contract. These agreements are legal in New York, so long as they meet certain criteria.

Other provisions can clarify issues like how an employee will handle sensitive business information or who owns any intellectual property that the employee may create as part of his or her job.

Finally, employers may also want to use the contract to exercise some control over what happens in the event of a dispute. For example, many employers find it beneficial to include provisions requiring that contract disputes be arbitrated as opposed to litigated in court.

New York employers have a lot of options when entering into an employment contract, and they should understand their alternatives.

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