The Chicago Employment Law Blog

What Employers Should Know About Employment Contracts

All employment contracts are not created equal. And if you are not careful about what you put in your boilerplate employment contracts, you may find yourself over-promising, violating the law, and potentially even being sued.

While it may be a good idea to start with a template to get certain standard provisions correct, it is important that you review each individual contract and make it specific for each position.

Some things you should keep in mind when reviewing your employment contracts can include:

  • Worker classification. Is the worker an employee or a contractor? This distinction may not seem too big of a deal, but it can have very important consequences. For example, you have to meet wage and hour requirements for employees and also record-keeping requirements. The requirements are different for contractors.

  • Your company policies. Just as you should review each employment contract, you must also review your company policies. The policies you put in place, and the handbooks you give out, are often considered binding agreements just like individual contracts. So you don't want to just copy and paste something like a sick leave or vacation policy.

  • Unenforceable contract terms. You may want to ensure that any employee who leaves your company has no shot at competing against you. However, these non-compete agreements are frequently illegal and unenforceable. Similarly, other contract terms, like those that require an employee to "volunteer" their time, should be kept out.

  • Professional contract review. The best way to ensure that your employment contract meets all legal requirements is to talk to an experienced employment attorney in your area. An attorney can help review your company needs and draft the best contract for your specific situation.

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