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Employers: Do You Know Enough About Employment Contracts?

On the surface, it might seem like all employment contracts look the same.

But they're not all the same. And depending on the situation in front of you and the type of person you're hiring, you might find yourself in a position where you need to have different contracts for different people.

Now, there's nothing wrong with using a template for your contracts. But at times, those contracts may need to be tweaked here and there.

And in many cases, those contracts should be run past an attorney, if even for a brief review, to make sure that you're offering the right terms to the right worker.

Here are three very important things to think about when signing contracts with employees or workers:

  1. Don't misclassify the worker. Misclassification can cost you. There's a difference between an employee and a contractor. It's not as simple as calling someone a contractor just because you pay him by the hour. If you misclassify your workers, you could be setting yourself up for labor law violations and possibly tax law violations as well.

  2. Read your employment policies. Just because a term isn't in the formal employment contract doesn't mean that it's not a part of the deal. For example, your employee handbook and policies are very much a part of the employment agreement. Make sure they're up to date and relevant to your workers. You may want to have an attorney look over your employee handbook too.

  3. Just because you put it in there, doesn't make it enforceable. There are many clauses which will be invalidated because the law doesn't allow for them. For example, unreasonable non-compete clauses are not allowed in many states. The same might be the case requiring a certain amount of "volunteer" hours from workers-- it's against wage and hour law and will not only be invalidated but can get you in deep trouble.

Don't be fooled by thinking that the contract you "bought" online is iron-clad. There's a great deal more to employment law than just drafting words on paper. Have an attorney review the contract and make sure that it's legally valid.

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