Should You Ask Employees to Sign an Employment Contract?

The Advantages and Disadvantages for Employers

The employees of a business are typically one of its most valuable assets. A common question that many business owners wrestle with is whether to put some or all employees under contract. There are definite advantages and disadvantages to doing that.

The Pros and Cons of Employment Agreements

Though the terms of an employment agreement can offer specific benefits to employers, simply offering or executing an employment contract can be beneficial. If you’re looking to hire key personnel, you’re likely to have more success finding and retaining the best candidates with an employment contract. Absent such an agreement, employees may be subject to “at-will” laws, which allow an employer to terminate employment for any reason at any time. An employment agreement will supersede that right.

In addition, an employment agreement can bring clarity to all terms of employment, like pay, benefits, and leave. You can also use an employment contract to protect trade secrets, inventions, or creative output and to set forth the terms of both non-compete and confidentiality agreements.

On the other hand, an employment contract gives an employer less flexibility with respect to employees who are not working out but who are also not violating the terms of their written employment contract. In such a situation, an employer might feel stuck with an employee they wish they could let go.

Contact Attorney Howard N. Sobel

At the office of Howard N. Sobel, we provide comprehensive legal counsel to businesses and business owners. Contact our office online or call us at 856-424-6400 to set up a free initial consultation. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.

Named a New Jersey SuperLawyer Every Year Since 2010-2022