You recently started your own business, and now it’s time to hire your initial employees. What you’re wondering is if you have to draft employment contracts. These could tell the employees what’s expected in the role, how many hours they’ll have to work, what their compensation will look like and much more. You have an idea of what you’re looking for in an employee as you create your job postings, so do you also have to create a contract for that employee?
There’s no legal obligation to do so. In fact, most workers in the United States do not have contracts. They are just considered at-will employees. As long as they want to work for the business and you want to continue employing them, the working relationship continues. Any time either one of you wants to end that relationship, you can do so. There’s no contract laying out the rules for how this has to happen.
Are there benefits to a contract?
You can certainly just hire at-will employees without worrying about drafting a contract. But there are some potential benefits to doing so.
For example, you could use the contract to stipulate how much notice someone has to give before they leave the business. If they haven’t signed a contract, there is no legal requirement to give notice at all. Many employers do ask for two weeks’ notice, but employees can choose whether or not they want to provide it. They certainly do not have to.
If you want to make sure that you always have a month – or even six months – to hire a replacement employee, though, you could use an employment contract to change this obligation – telling the employee that notice is now required. They do have to follow the contract that they signed.
The legal side of being an employer can get complex. Be sure you know what legal options you have.