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Provisions to consider when drafting employment contracts

| Feb 2, 2021 | Employment Law |

Employment contracts are common throughout many industries. They ensure that both the employer and employee know what they want and what they will get in return. They give a sense of stability in our increasingly “at-will” work environment. But, there are a few provisions that employers and employees should consider.

Exclusive employment

If one is working full-time, it is natural for an employer to believe that they are the employee’s only source of income. Though, that is not guaranteed. Without this provision, which ensures that an employee is not working for anyone else in the same or similar type of business, an employee could work part-time for a competitor.

No additional compensation

This employment contract provision is for higher-level employees as it states that if that employee gets a board or officer position, the manger will not get additional compensation. This is especially important for those seeking or currently in C-level positions.

Agency, or no authority to contract

This provision outlines the employment relationship that specifies that there is no agency relationship. This means that the employee cannot obligate or enter into contracts for the employer. This is important for those employees that could interact with customers or other businesses as they could potentially bind the employer.

Choice of law

This provision states which state’s laws govern the contract. Depending on the business and nature of the contract, this can be an extremely important provision as employment laws can very greatly from state to state.

For New York, New York, employers and employees, employment contracts can be a great tool. They can give employers the guarantees they need to justify the steep cost that some specialized employees request as a result of the employment contract guarantees.