Overview: Employment contracts set out the duties of the employee and employer, and provide the employer with the opportunity to clarify the relationship. The specific terms required in an employment agreement vary by state and by type of employment or profession. Although the terms of employment contracts may differ, every written contract of employment should be signed by both the employer and the employee.
Some states recognize implied employment contracts when an employer makes statements or takes certain actions that are inconsistent with an at-will employment relationship - even if they are unintentional. If an implied employment contract is found, an employer may be bound by its terms. Therefore, since employment contract law is state driven, employers should check the laws in which they do business in order to avoid creating an implied employment contract.
Trends: Employers continue to be exposed to claims by at-will employees, who claim that their termination of employment was in violation of an implied employment contract based on language contained in an offer letter or employee handbook, or by verbal statements of job security by the employer. Therefore, if an at-will employment relationship is intended, employers must make clear to the employee that he or she is an at-will employee and disclaim any contractual relationship.
Author: Melissa A. Silver, JD, Legal Editor
Updated to include the notice-posting provisions of the Tipped Wage Workers Fairness Amendment Act of 2018, effective December 13, 2018.
Year-end is a time typically focused on endings and for HR that means finalizing benefits enrollment, processing performance appraisals and completing payroll filings. But equally important is to prepare for new compliance requirements that will ring in the New Year.
Updated to reflect notice-posting requirements in the forthcoming Oakland Hotel Minimum Wage and Working Conditions ordinance.
Updated to reflect legal developments regarding the forthcoming Austin paid sick leave law.
Updated to reflect retaliation protections under the forthcoming Westchester County paid sick leave law.
Updated to reflect notice-posting requirements under the forthcoming Westchester County paid sick leave law and amendments to the New York City paid sick leave notice requirements, effective September 20, 2018.
Revised to reflect the forthcoming effective date for the Illinois Service Member Employment and Reemployment Rights Act.
Updated to reflect notice-posting and confidentiality requirements under the state paid sick leave law and to remove the preempted local paid sick leave laws, effective October 29, 2018.
Guidance for HR on the use of employment contracts. Support on creating and enforcing legally binding contracts that cover all the vital areas.